It’s been a difficult experience for the crypto market through 2022. In November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. And every time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows 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 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 more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to more people being involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations from 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 mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
laptops for crypto trading
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and hold crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a form of payment, it makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market will see a recovery in 2023. If you’re committed to the long run, being patient and disciplined is crucial.