It’s been a difficult journey for the cryptocurrency market in 2022. By November the market had dropped by 70 percent from the previous high at the end of November. Just when the market was going downhill, the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to increasing participation in the crypto market which could boost prices.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in higher prices.
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to grow, it will become easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are committed to the long haul Being patient and disciplined is essential.