It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Each time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. In 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. In the future, as more people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to become aware about and appreciate it. As awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting to accept crypto as a method 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 investments, are starting to look at crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for people to buy and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
In the event that more merchants accept cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long run, being patient and disciplined is crucial.