It’s been a rough ride for the crypto market until 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. When things were going downhill, the FTX crash turned them 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 seen its fair share of dips in the past. And every time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could result in more people being involved in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like gold and crypto. 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, also known as individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend it. As understanding and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can drive up prices.
tower finance crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Use of crypto for international payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase it will be easier for consumers to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept cryptocurrency as a method of payment, it makes it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market could see a recovery in 2023. If you’re committed to the long-term patience and discipline is essential.