It’s been a difficult ride for the crypto market in 2022. By November, the market had dipped by 70% from its previous peak at the end of November. When things were going downhill and down, the FTX crash turned things even worse. 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 drops in the past. And every time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, drive the prices up.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. 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 crypto market and result in greater prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting crypto as a means of payment, this makes it easier for people to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re committed to the long-term patience and discipline is crucial.