It’s been a rough ride for the crypto market in 2022. As of November the market was down by 70% from its previous peak at the end of November. When things were going downhill and down, the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. Then, 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 previously, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries adopting 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 could lead to more people being involved in the crypto market which could drive the prices up.
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 beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and lead to greater prices.
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for people to buy and store crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a means of payment, this will make it easier for consumers to use and hold crypto, which can drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long-term Being patient and disciplined is crucial.