It’s been a tough journey for the cryptocurrency market through 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned them even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Every time, it has bounced back with a huge 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. However, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after 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 eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could result in more people getting involved in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to increase. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. In the future, as more people learn about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which can increase prices.
finviz for crypto
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for consumers to purchase and keep crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and consequently higher prices for crypto.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this makes it easier for people to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long run patience and discipline will be key.