It’s been a rough ride for the crypto market in 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. When things were looking down and down, the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations 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, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to become aware about it and comprehend it. As understanding and acceptance of crypto grows it could result in more people buying or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, it will make it easier for customers to use and hold crypto, which could increase demand and price.
So, will crypto rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined is crucial.