It’s been a difficult experience for the crypto market until 2022. In November the market had dropped by 70% from its previous peak at the end of November. When things were going downhill after the FTX crash turned them 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 many drops in the past. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke the record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had 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 previously, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology 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 increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven investments like gold and crypto. 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 people who are interested in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. As more and more everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this can raise prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to increase it will be easier for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting cryptocurrency as a method of payment, it makes it easier for people to use and hold cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? The only way to know is time. With these things being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. For those in it for the long run Being patient and disciplined will be key.