It’s been a tough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned them even worse. So, will 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. Every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest 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 such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. As more and more people learn about crypto and the best ways to invest 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 crypto market grows, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
crypto taxes switzerland
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, this makes it easier for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those committed to the long run, being patient and disciplined will be key.