It’s been a rough ride for the crypto market in 2022. By November the market was down by more than 70 percent from the previous high in November 2021. When things were getting worse and down, the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. And every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each 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 long bull run that finally overcomes the resistance set by the previous high price. This 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 the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. 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 getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are starting to learn about and understand the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are now beginning to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it will make it easier for customers to utilize and store crypto, which can increase demand and price.
So, will crypto rise in 2023? The only way to know is time. But with these factors to consider, it’s possible 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.