It’s been a rough ride for the crypto market through 2022. By November, the market had dipped by 70% from its previous peak in November 2021. When things were getting worse after the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. And every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and result in greater prices.
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. As more and more everyday people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this could drive up prices.
business plan for crypto exchange
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created on top of 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.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its capability to perform quick and inexpensive 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 prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stock or real estate 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
With the increasing number of merchants begin accepting crypto as a means of payment, it will make it more convenient for customers to utilize and store 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 see a recovery in 2023. If you’re in it for the long run patience and discipline will be key.