It’s been a rough ride for the crypto market through 2022. As of November the market was down by more than 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash turned things 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. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow, it will become easier for people to buy and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses accept crypto as a form of payment, this will make it easier for people to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long-term Being patient and disciplined is essential.