It’s been a rough experience for the crypto market in 2022. As of November the market had dropped by 70% from its previous peak at the end of November. And just when things were looking down, the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Each time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are now exploring the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. In the future, as more people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
jup crypto price
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. 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 increase it will be easier for individuals to purchase and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, this will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.