It’s been a rough experience for the crypto market until 2022. As of November the market had dropped by 70 percent from the previous high in November 2021. Just when the market was getting worse and down, the FTX crash made them look even more dire. So, will 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. Every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. In 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 had another dip. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case could result in more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
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 continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
ethereum cofounder has him quitting crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants accept crypto as a form of payment, this will make it more convenient for consumers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is essential.