It’s been a tough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were going downhill after the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017, it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that finally surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could result in increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules 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 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. 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 progress is made in areas like security and scalability, 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 caused by the COVID-19 pandemic and other factors many investors are starting 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.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services built on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s continue to increase, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding 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.
More adoption by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it easier for customers to hold and use crypto, which can increase demand and price.
Will crypto be on the rise in 2023? The only way to know is time. With these things in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long run Being patient and disciplined is crucial.