It’s been a tough ride for the crypto market through 2022. In November the market had dropped by 70 percent from the previous high in November 2021. And just when things were going downhill after the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. Every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This is evident not only in 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 better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the market which could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. As more and more people learn about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto 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
The number of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers accept crypto as a form of payment, this will make it easier for people to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors being considered, it’s likely that the crypto market could see a recovery in 2023. For those in it for the long haul Being patient and disciplined is crucial.