It’s been a tough journey for the cryptocurrency market in 2022. By November the market had dropped by more than 70 percent from its previous high at the end of November. Just when the market was looking down, the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Each time, it’s bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
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 crypto assets will grow. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
verified crypto traders
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses accept crypto as a form of payment, it will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined will be key.