It’s been a difficult ride for the crypto market in 2022. By November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was going downhill and down, the FTX crash turned things even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on 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. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built upon blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of 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 increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset such as real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, it will make it more convenient for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long run Being patient and disciplined is essential.