It’s been a tough journey for the cryptocurrency market through 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse and down, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. Every time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to more people being involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond 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 increase investment and enthusiasm in cryptocurrency.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested 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 are educated about crypto and the best ways to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, it can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, this will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long haul Being patient and disciplined is crucial.