It’s been a difficult journey for the cryptocurrency market in 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were getting worse and down, the FTX crash turned them more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. Every time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in many ways. And this growing use case could lead to increasing participation in the market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about crypto and the best ways to invest 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 crypto
As the crypto market is maturing as more and more people are starting to learn about and understand it. As understanding and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
vet crypto forecast
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, it makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market will have a rebound by 2023. For those in it for the long haul patience and discipline will be key.