It’s been a tough experience for the crypto market through 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash turned things even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand could result in more people being involved in the market which could drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more people become aware of crypto and how to invest in it this could result in more 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 understand the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.