It’s been a difficult experience for the crypto market through 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. When things were looking down, the FTX crash turned things even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many drops in the past. Every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation 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 ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are beginning to learn about and understand the concept. As awareness and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could increase prices.
lamden crypto
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be easier 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, such as stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, this will make it easier for customers to use and hold crypto, which can increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re in it for the long run patience and discipline will be key.