It’s been a tough ride for the crypto market until 2022. As of November the market was down by 70 percent from the previous high in November 2021. Just when the market was going downhill after the FTX crash made them look worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many 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 crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through 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 an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi grows and more platforms and projects are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to explore 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.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for people to buy and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
In the event that more merchants begin accepting cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long run patience and discipline will be key.