It’s been a rough ride for the crypto market until 2022. As of November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned things even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke the record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to more people getting involved in the market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and understand the concept. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be more convenient for people to buy and store cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like real estate or stock are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a means of payment, this will make it easier for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to rise in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline is essential.