It’s been a difficult ride for the crypto market in 2022. By November the market was down by more than 70 percent from its previous high in November 2021. And just when things were looking down after the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. However, in 2017, it broke the record and reached a new record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. This growing demand could result in more people being involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like gold and crypto. As the global economic situation is 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 cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the market for crypto. As more and more everyday people become aware of crypto and how 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, more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows, it will lead to more people buying and holding crypto, which could raise prices.
what are doas crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase, it will become easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers begin accepting crypto as a means of payment, this will make it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long run patience and discipline will be key.