It’s been a rough ride for the crypto market in 2022. By November, the market had dipped by 70 percent from the previous high at the end of November. And just when things were looking down after the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people being involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as 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 get involved in the crypto market. In the future, as more people are educated about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is the ability to facilitate 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 costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for people to buy and keep crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants start accepting crypto as a means of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long haul patience and discipline will be key.