It’s been a difficult experience for the crypto market in 2022. In November the market was down by more than 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us 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 previously, dips tend to be followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than 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 businesses and industries embracing it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could result in increasing participation in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits 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 demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a means of payment, it makes it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is essential.