It’s been a rough ride for the crypto market in 2022. In November the market had dropped by 70% from its previous peak in November 2021. When things were 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 crypto market, especially Bitcoin has had many drops in the past. Every time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Then, 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 lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. And this growing use case could result in more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases 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. This will increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can raise prices.
buying elongate crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a form of payment, it will make it easier for consumers to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long-term patience and discipline will be key.