It’s been a rough ride for the crypto market through 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through the resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after 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 eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. This growing demand could lead to increasing participation in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi expands 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 is growing increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto 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.
With the amount of crypto ATM’s continue to grow it will be easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is crucial.