It’s been a rough experience for the crypto market through 2022. By November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse and down, the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. And every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows 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 overcomes the resistance set by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case can lead to more people being involved in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive 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 many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond 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 increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as gold and crypto. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the crypto market. As more and more people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages 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 it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for people to buy and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a form of payment, this will make it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is essential.