It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Each time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. And 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
As we’ve seen before, fall-offs 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 not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature, more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a method of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are starting to show interest in crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for consumers to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses start accepting cryptocurrency as a method of payment, this makes it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are in it for the long run patience and discipline is crucial.