It’s been a rough ride for the crypto market in 2022. In November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash turned things more dire. 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 rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And 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
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. The growing popularity of crypto could lead to increasing participation in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to become aware about and appreciate it. As awareness and acceptance grows of crypto it could result in more people purchasing and holding crypto, which could increase prices.
crypto mining hosting companies
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to look at crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto 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 could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be easier for people to buy and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a means of payment, it makes it easier for people to use and hold crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long run Being patient and disciplined is crucial.