It’s been a tough experience for the crypto market through 2022. By November, the market had dipped by 70% from its previous peak at the end of November. And just when things were going downhill, the FTX crash turned them even more dire. 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 bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a long bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to explore crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase it will be easier for people to buy and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses accept cryptocurrency as a method of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will increase demand and price.
So, will crypto increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. For those committed to the long run patience and discipline is essential.