It’s been a difficult experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from the previous high in November 2021. When things were getting worse after the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Every time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke that record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident in more than 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 taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand can lead to more people getting involved in the market and, in turn, boost prices.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and lead to greater prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto 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.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long run patience and discipline is crucial.