It’s been a rough experience for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was getting worse after the FTX crash made them look even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every 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 lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could result in increasing participation in the market which could boost prices.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. As the global economic situation remains 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 one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
best indicator for crypto trading
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services built upon blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to look at crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in 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 result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, it will make it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long-term patience and discipline is crucial.