It’s been a rough journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was looking down after the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows 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 before, fall-offs tend to be followed by a long bull run that finally overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also 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 adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to more people getting involved in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of people learn about crypto and how 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, more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can raise prices.
crypto swap profits
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion 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 main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, it makes it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long haul Being patient and disciplined will be key.