It’s been a tough journey for the cryptocurrency market until 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were getting worse after the FTX crash made them look 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 many drops in the past. Each time, it’s bounced back by a massive increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, 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 the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following 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 lengthy bull run, which eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more everyday people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
crypto wealth management companies
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are starting to explore crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, this makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. For those in it for the long run patience and discipline will be key.