It’s been a difficult ride for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak in November 2021. When things were looking down, the FTX crash turned things 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 has bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. 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 long bull run that finally surpasses the resistance created by the market’s previous highest 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 more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could result in more people getting involved in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
crypto optimist
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created on top of blockchain technology. As DeFi continues to grow 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 market for crypto is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use 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 ATMs for crypto continue to grow, it will become easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a means of payment, this will make it easier for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long run patience and discipline will be key.