It’s been a difficult experience for the crypto market through 2022. In 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 made them look more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. And every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017, it broke the record, and hit a new record high of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the crypto market and result in higher prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable rules for crypto. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to look at crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a means of payment, it will make it more convenient for people to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase 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. If you’re committed to the long-term Being patient and disciplined will be key.