It’s been a difficult ride for the crypto market through 2022. By November the market had dropped by 70% from its previous peak on November 20, 2021. And just when things were getting worse, the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. But, in 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip the bull runs.
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 market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent years 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 in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Government regulations
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the crypto market. As more and more people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about it and comprehend it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
crypto rover
Decentralized finance (DeFi) is an emerging area of the crypto market that allows financial services to be created using blockchain technology. As DeFi expands and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase it will be easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, it will make it more convenient for customers to use and hold crypto, which can increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long haul Being patient and disciplined is essential.