It’s been a rough ride for the crypto market in 2022. By November the market had dropped by 70 percent from the previous high in November 2021. And just when things were getting worse, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. And every time, it’s bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to grow it will be more convenient for people to buy and store crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long haul, being patient and disciplined is crucial.