It’s been a tough experience for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were looking down and down, the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven that following each dip, there’s a bull run.
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 that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could lead to more people getting involved in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and result in greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are beginning to become aware about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
managing crypto portfolio
Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency 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 increase 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 represent ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand and higher prices for crypto.
More adoption by merchants
With the increasing number of merchants accept crypto as a form of payment, this makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those committed to the long haul Being patient and disciplined is essential.