It’s been a difficult ride for the crypto market until 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. When things were looking 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 seen many dips over the years. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017 it broke that record and hit a record high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in 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
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are 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 grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow, it will become easier for people to buy and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re in it for the long-term Being patient and disciplined will be key.