It’s been a rough journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse, the FTX crash turned them even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Each time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017 it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run that eventually overcomes the resistance set by the previous high price. This 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 the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people being involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and lead to greater prices.
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
crypto e commerce
Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part 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 cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for individuals to purchase and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a means of payment, it will make it more convenient for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market could have a rebound by 2023. For those looking to invest for the long-term, being patient and disciplined is crucial.