It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. When things were getting worse, the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. 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
Just like we’ve seen in the past, dips are usually followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to become aware about and appreciate it. As the awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
crypto cup and handle
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be built using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are beginning to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize 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 continue to increase it will be easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers accept cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long run, being patient and disciplined is essential.