It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. When things were getting worse and down, the FTX crash made them look more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. And every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven 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 long bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could result in increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like gold and crypto. Because the global economic climate is uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. As more and more people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built upon blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting crypto as a form of payment, it makes it easier for consumers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long haul, being patient and disciplined will be key.