It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak at the end of November. Just when the market was going downhill after the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading 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, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. This growing demand can lead to more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could provide more stability to the crypto market and could 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 rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. As more and more people learn about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend it. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a means of payment, this will make it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long haul Being patient and disciplined will be key.