It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was going downhill after 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 drops in the past. Each time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. In the future, as more people are educated about crypto and how 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 continues to mature, more and more people are beginning to learn about and understand it. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to show interest in crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants accept crypto as a form of payment, it will make it easier for people to utilize and store crypto, which could increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could see a recovery in 2023. For those looking to invest for the long run patience and discipline is crucial.