It’s been a tough experience for the crypto market through 2022. By November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were going downhill and down, 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 drops in the past. Each time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in more than Bitcoin but also 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 it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could result in more people getting involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the crypto market. As more and more people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built using blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long-term Being patient and disciplined is crucial.