It’s been a difficult experience for the crypto market in 2022. By November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was looking down, the FTX crash turned things even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. And 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 over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent 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. And this growing use case could result in more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as 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
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could raise prices.
crypto correlation table
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built using blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of cryptocurrency 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 prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be easier for people to buy and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a form of payment, it makes it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market could be able to see a rebound in 2023. For those in it for the long haul, being patient and disciplined is essential.