It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were getting worse after the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. And every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows 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 before, fall-offs tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident not only in 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 adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. This growing demand could result in more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people are educated about 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 market for crypto continues to mature as more and more people are beginning to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a method 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 beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase it will be easier for people to buy and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a means of payment, this makes it easier for people to hold and use crypto, which can drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could see a recovery in 2023. For those committed to the long-term patience and discipline is crucial.