It’s been a difficult ride for the crypto market in 2022. As of November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was looking down and down, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Every time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking 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 increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the cryptocurrency market. As more and more everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to learn about and understand the concept. As the awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be more convenient for individuals to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
In the event that more businesses accept crypto as a means of payment, this makes it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long haul Being patient and disciplined will be key.