It’s been a difficult ride for the crypto market through 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. And just when things were going downhill after the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. And every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017 it broke that record and hit a record record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through the 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 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 are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to more people getting involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. As more and more people learn about crypto and the best ways to invest in it, this could lead to increased 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 it. As awareness and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, this will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term patience and discipline is essential.