It’s been a tough experience for the crypto market in 2022. By November the market had dropped by 70 percent from its previous high at the end of November. And just when things were getting worse, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. And every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown 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 lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market, which in turn could boost prices.
Increased institutional interest in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. As more and more people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, it will make it easier for customers to hold and use cryptocurrency, which will increase demand and price.
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 haul Being patient and disciplined is crucial.