It’s been a rough ride for the crypto market through 2022. By November, the market had dipped by more than 70 percent from its previous high in November 2021. When things were looking down, 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 market for crypto, particularly Bitcoin has had many dips in the past. Each time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run, which eventually breaks through 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 and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could lead to increasing participation in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. Because the global economic climate is uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. With increasing numbers of people are educated about crypto and how to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows it could result in more people purchasing and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are committed to the long run Being patient and disciplined is essential.