It’s been a tough ride for the crypto market through 2022. As of November the market was down by 70 percent from its previous high in November 2021. When things were looking down, the FTX crash made them look 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 had its fair share of dips over the years. And every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually surpasses the resistance created 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 made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could lead to increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the crypto market. In the future, as more everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to learn about and understand it. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that can increase prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of 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 is growing as more and more businesses are starting using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for individuals to purchase and store crypto, which will 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 stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a means of payment, this makes it easier for people to use and hold cryptocurrency, which will drive up demand and 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 will have a rebound by 2023. If you’re looking to invest for the long run Being patient and disciplined will be key.