It’s been a rough ride for the crypto market through 2022. As of November the market had dropped by 70% from its previous peak in November 2021. When things were getting worse 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 market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us 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 are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance, crypto is being used in many ways. And this growing use case can lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the 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 through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. As more and more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for consumers to purchase and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this will make it easier for people to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long run Being patient and disciplined will be key.