It’s been a rough experience for the crypto market in 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. When things were looking down, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded with a big increase.
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 record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new high of $68,000 in November 2021. And 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
As we’ve seen before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market continues to mature 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 underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could raise prices.
crypto augmented reality
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for people to buy and keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a means of payment, it makes it easier 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. But with these factors to consider, it’s possible that the crypto market will have a rebound by 2023. For those in it for the long haul patience and discipline is crucial.