It’s been a rough ride for the crypto market in 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were looking down and down, the FTX crash turned them 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 its fair share of dips in the past. And every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke that record and hit a record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. And this growing use case could result in more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases 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 increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and understand the concept. As understanding and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created upon blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to explore crypto as an asset class. As more 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 major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting crypto as a means of payment, it will make it more convenient for customers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined is crucial.