It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. When things were looking down, 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 drops in the past. And every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
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 that eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. This growing demand could result in more people being involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and could lead to greater prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people learn about cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this could drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are beginning to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for consumers to purchase and keep cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses accept crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.