It’s been a difficult journey for the cryptocurrency market through 2022. As of November the market had dropped by 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. And every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in many ways. This growing demand could lead to more people getting involved in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to more expensive prices.
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are starting to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to explore crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for consumers to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers start accepting crypto as a means of payment, it will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. For those committed to the long-term patience and discipline is essential.