It’s been a tough ride for the crypto market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. And just when things were looking down after the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had 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
As we’ve seen in the past, dips are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking 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 cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
able finance crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses begin accepting crypto as a form of payment, this makes it easier for people to use and hold crypto, which can increase demand and price.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul patience and discipline will be key.