It’s been a tough ride for the crypto market in 2022. In November, the market had dipped by more than 70% from its previous peak at the end of November. Just when the market was getting worse after the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident not only in 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 better companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand can lead to increasing participation in the market which could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring 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 of the government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is 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 people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
unsecured crypto loan
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a form of payment, this will make it more convenient for people to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors to consider, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined is essential.