It’s been a difficult experience for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were going downhill and down, the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. And every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case can lead to increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. 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.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it more convenient for people to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run, being patient and disciplined will be key.