It’s been a rough journey for the cryptocurrency market through 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about it and comprehend it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform 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 demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a means of payment, this makes it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are in it for the long haul patience and discipline is crucial.