It’s been a difficult ride for the crypto market until 2022. As of November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was going downhill 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 cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. 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 in the past, dips tend to be followed by a prolonged bull run, which 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 cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. This growing demand can lead to increasing participation in the market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond 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, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about 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 cryptocurrency
As the crypto market continues to mature, more and more people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto, it will lead to more people buying as well as holding the crypto that can increase prices.
webull paper trading crypto
Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which can increase demand and price.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market will see a recovery in 2023. For those looking to invest for the long run patience and discipline will be key.