It’s been a difficult experience for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually breaks through the resistance created 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 come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. And this growing use case could lead to more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in 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 cryptocurrency market. In the future, as more everyday people are educated about crypto and how to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for people to buy and hold crypto, which could increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a means of payment, it will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long run Being patient and disciplined will be key.