It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. And just when things were going downhill after the FTX crash turned them even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us 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 tend to be followed by a long bull run that finally overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can 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 the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
algorithmic trading crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to show interest in crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors to consider, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long run patience and discipline is crucial.