It’s been a tough journey for the cryptocurrency market until 2022. In November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse, the FTX crash made them look even 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 over the years. Each time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are now exploring the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. With increasing numbers of people are educated 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 market for crypto is maturing increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services created using blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning 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.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to explore crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow, it will become easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, this will make it easier for consumers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline is crucial.