It’s been a difficult ride for the crypto market in 2022. As of November the market was down by more than 70 percent from its previous high at the end of November. And just when things were getting worse and down, the FTX crash made them look more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Each time, it’s bounced back by a massive rally.
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 hit a record highest of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are usually followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. 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 market for crypto continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are starting to learn about it and comprehend it. As understanding and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which can drive up prices.
way senate melted crypto is very
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, it will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could have a rebound by 2023. For those in it for the long run, being patient and disciplined will be key.