It’s been a difficult journey for the cryptocurrency market through 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. And just when things were looking down after the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back with a big rise.
For instance, in 2013, 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 hit a record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had 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
As we’ve seen before, fall-offs are usually followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the market, which in turn could boost prices.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. As more and more everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and hold crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, it will make it more convenient for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re looking to invest for the long run patience and discipline is crucial.