It’s been a difficult experience for the crypto market in 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. Just when the market was looking down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. And every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had 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 are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography 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 result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as 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 it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. As more and more everyday people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long run, being patient and disciplined is crucial.