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 at the end of November. And just when things were going downhill after the FTX crash turned them even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. And every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are starting to explore the potential for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and result in more expensive 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 cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and 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
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 crypto market. In the future, as more everyday people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing, more and more 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 can increase prices.
crypto rangers
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a means of payment, it will make it easier for people to use and hold crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could see a recovery in 2023. And for those who are committed to the long-term, being patient and disciplined is essential.