It’s been a rough experience for the crypto market in 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were getting worse, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached 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 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 prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This is evident not only in 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 companies and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as increased 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, also known as individual investors are also beginning to get involved in the cryptocurrency market. As more and more everyday people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which could drive up prices.
crypto market opening time
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a form 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
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a form of payment, it makes it easier for consumers to hold and use crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects to consider, it’s likely that the crypto market could be able to see a rebound in 2023. For those committed to the long run, being patient and disciplined will be key.