It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was getting worse, 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 experienced its fair share of drops in the past. And every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, 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 in the past, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand can lead to more people being involved in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and result in greater prices.
As the market for crypto is maturing as it matures, governments all over the world are starting to create more favorable rules for crypto. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. 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 factors increasing numbers of investors are looking for safe haven assets like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. As more and 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 grows as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could drive up prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created upon blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and increased 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 means 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
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase it will be more convenient for people to buy and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers start accepting crypto as a means of payment, this makes it easier for customers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. For those committed to the long run patience and discipline is essential.