It’s been a rough journey for the cryptocurrency market in 2022. As of November, the market had dipped by 70% from its previous peak on November 20, 2021. Just when the market was getting worse after the FTX crash turned them more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Each time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. However, in 2017, it broke the record and hit a record record high of $19,600. In 2018, it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. 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
As we’ve seen before, fall-offs are usually followed by a prolonged 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 cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market which could increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Government regulations
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and understand the concept. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services developed using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies are starting using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to look at crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be easier for people to buy and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, this will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and 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 be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.