It’s been a difficult ride for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were going downhill after the FTX crash made them look even more dire. 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 over the years. And every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown 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 are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and result in higher prices.
Government regulations
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond just 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, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are beginning to learn about and appreciate it. As understanding and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are beginning to look at crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and store cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this makes it easier for customers to use and hold crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors being considered, it’s likely that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline will be key.