It’s been a tough ride for the crypto market in 2022. By November the market had dropped by 70% from its previous peak at the end of November. When things were getting worse and down, the FTX crash made them look even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations 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 higher prices.
Government regulations
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
buy paysafecard with crypto
Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, it will make it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.