It’s been a difficult ride for the crypto market through 2022. In November the market had dropped by more than 70 percent from the previous high in November 2021. Just when the market was getting worse, the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. 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
Similar to what we’ve witnessed previously, dips are usually followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in greater prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
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, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. As more and more people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this can increase prices.
look web3 crypto kids
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to look at crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for consumers to purchase and hold cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
In the event that more merchants start accepting crypto as a form of payment, it makes it easier for people to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term, being patient and disciplined will be key.