It’s been a rough experience for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which could increase prices.
shopify crypto payments
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are beginning to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, it makes it easier for customers to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. For those in it for the long-term Being patient and disciplined will be key.