It’s been a tough experience for the crypto market through 2022. In November the market was down by 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash turned things even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many drops in the past. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that following 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 lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could result in increasing participation in the market and, in turn, increase the price.
Increased institutional interest in crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can increase prices.
how to become a professional crypto trader
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which could drive up demand and prices.
Will crypto be on the increase in 2023? Only time will tell. With these things in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined is crucial.