It’s been a rough ride for the crypto market through 2022. As of November the market was down by 70% from its previous peak in November 2021. When things were going downhill, the FTX crash turned things even worse. The question is, can 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. Each time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. And 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
As we’ve seen previously, dips tend to be followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in many ways. This growing demand could result in increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and lead to more expensive prices.
As the crypto market grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting 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 grows as more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase it will be more convenient for people to buy and store crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, this will make it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market could have a rebound by 2023. For those in it for the long haul, being patient and disciplined will be key.