It’s been a rough experience for the crypto market through 2022. As of November the market had dropped by more than 70 percent from the previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. And every time, it’s rebounded by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities of crypto assets. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows financial services to be developed on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and store crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, this will make it easier for people to utilize and store crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long haul Being patient and disciplined will be key.