It’s been a rough experience for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
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 eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case can lead to increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for crypto. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind 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 benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows it could result in more people buying and holding crypto, which can raise prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created using blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds dedicate a part 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 main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow, it will become easier for people to buy and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses begin accepting cryptocurrency as a method of payment, this makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined is crucial.