It’s been a difficult ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash turned them more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Each time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017, it broke the record and reached a new high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could result in more people being involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and result in more expensive prices.
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This is likely to attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. As more and more people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of crypto grows it could result in more people purchasing and holding crypto, which could raise prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is essential.