It’s been a tough experience for the crypto market in 2022. As of November the market had dropped by 70 percent from the previous high on November 20, 2021. Just when the market was going downhill, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could lead to more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This will stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will grow. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about and understand the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can increase prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a method of payment. This could result in increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a form of payment, this will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long-term Being patient and disciplined is crucial.