It’s been a difficult ride for the crypto market in 2022. In November, the market had dipped by more than 70% from its previous peak at the end of November. When things were looking down, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Every time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. 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 hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen 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 in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. As more and more people are educated about crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s increase it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting crypto as a form of payment, it will make it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. And for those who are in it for the long-term patience and discipline is essential.