It’s been a tough ride for the crypto market in 2022. In November the market had dropped by more than 70 percent from its previous high on November 20, 2021. When things were getting worse after the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through that 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 after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set 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 come a long way in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the market which could boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate it. As the awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long-term patience and discipline is essential.