It’s been a tough experience for the crypto market in 2022. By November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were looking down and down, the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. And every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
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. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. As more and more people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to learn about and understand the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a method of payment. This could lead to an increase in the 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 owned by the state as instruments for investing, are beginning to explore crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, this will make it easier for people to hold and use crypto, which could increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long run patience and discipline is crucial.