It’s been a rough experience for the crypto market in 2022. By November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was getting worse, 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 crypto market, especially Bitcoin has had many drops in the past. Each time, it’s rebounded with a big rise.
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 the record and reached a new high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of 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 usually followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. And this growing use case could result in more people being involved in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning 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 result in more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows, it will lead to more people buying or holding cryptocurrency, and this can increase prices.
tax-free crypto countries
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase, it will become easier for people to buy and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, it makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined is crucial.