It’s been a rough experience for the crypto market in 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash made them look more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Each time, it has bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors, are also starting to invest in the crypto market. In the future, as more everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate it. As awareness and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a means of payment, this will make it more convenient for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long-term Being patient and disciplined is essential.