It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by 70% from its previous peak on November 20, 2021. When things were looking down 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 market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new highest of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in many ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions 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 higher prices.
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain technology and cryptography are still in the beginning 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 use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about and understand it. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to 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 grow it will be more convenient 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 represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting crypto as a form of payment, it makes it easier for customers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto 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 essential.