It’s been a tough ride for the crypto market through 2022. In November the market had dropped by 70 percent from its previous high at the end of November. When things were looking down after the FTX crash turned them even worse. 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 in the past. Every time, it’s rebounded with a huge increase.
For example, 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 that record and reached a new high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and better 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. And this growing use case can lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. As more and more people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this could increase prices.
crypto script
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows finance services developed on top of blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be 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.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be more convenient for individuals to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants accept crypto as a form of payment, this will make it easier for people to utilize and store crypto, which could increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long haul, being patient and disciplined will be key.