It’s been a rough experience for the crypto market in 2022. In November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was getting worse and down, the FTX crash made them look even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s bounced back with a big increase.
For instance, 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 reached a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, history has shown us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could result in increasing participation in the market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this could raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are starting to look at crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses start accepting crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline will be key.