It’s been a rough experience for the crypto market through 2022. By November the market had dropped by 70 percent from the previous high at the end of November. And just when things were looking down and down, the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. And every time, it’s bounced back with a big rally.
In 2013, for instance, 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 record high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries adopting it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is 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 continue to increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the crypto market. With increasing numbers of people are educated about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
crypto social tokens
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a form 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
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase, it will become easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a form of payment, it will make it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long haul patience and discipline is crucial.