It’s been a rough ride for the crypto market in 2022. As of November the market had dropped by 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke that 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 that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. 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
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also 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 taking to it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or 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 lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and appreciate the concept. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to make 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.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
As more and more merchants accept cryptocurrency as a method of payment, it will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long run Being patient and disciplined will be key.