It’s been a rough journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. When things were getting worse after the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows as more and more people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
alternatives to crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. 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
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants accept crypto as a means of payment, this will make it easier for customers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long haul Being patient and disciplined will be key.