It’s been a tough ride for the crypto market in 2022. As of November the market had dropped by 70 percent from its previous high in November 2021. When things were looking down, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back by a massive rise.
For example, 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 that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. The increased interest of institutions can bring stability to the market for crypto and result in higher prices.
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and 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 one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are starting to learn about and appreciate the concept. As understanding and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could raise prices.
crypto currency strength meter
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a form of payment, it makes it easier for consumers to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long haul Being patient and disciplined will be key.