It’s been a difficult journey for the cryptocurrency market in 2022. As of November the market had dropped by 70% from its previous peak on November 20, 2021. And just when things were going downhill, the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. 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 are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is rising. 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 being involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
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, the potential of crypto assets will expand. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it This could result in increased 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 understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
waters above crypto
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning 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.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be more convenient for consumers to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants accept cryptocurrency as a method of payment, it will make it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. With these things being considered, it’s likely 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 crucial.