It’s been a tough ride for the crypto market in 2022. As of November the market was down by more than 70 percent from the previous high at the end of November. When things were going downhill and down, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Each time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in 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 businesses and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about crypto and how to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long haul Being patient and disciplined is essential.