It’s been a difficult journey for the cryptocurrency market in 2022. In November the market had dropped by 70 percent from the previous high in November 2021. When things were getting worse after the FTX crash made them look even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven 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 tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could result in increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of people are beginning to become aware about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services built upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be more convenient for people to buy and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, it makes it easier for people to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long run, being patient and disciplined is essential.