It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were looking down and down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. And every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. In 2017, it broke the record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people getting involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting cryptocurrency as a method of payment, this makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. With these things in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline is essential.