It’s been a rough ride for the crypto market in 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. Just when the market was looking down, the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. This growing demand could lead to more people being involved in the market, which in turn could increase the price.
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, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals 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 easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
The 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 rapidly expanding sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a form of payment, it will make it more convenient for customers to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long-term, being patient and disciplined is essential.