It’s been a difficult ride for the crypto market until 2022. In November, the market had dipped by more than 70 percent from the previous high in November 2021. Just when the market was going downhill, the FTX crash turned them even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This is evident in more than 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 better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could lead to more people getting involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Regulations from the Government
As the market for crypto grows 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 acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors are also beginning to invest in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services built using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning accepting crypto payments as 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 investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be easier for individuals to purchase and store cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting cryptocurrency as a method of payment, it makes it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, will crypto rise in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. If you’re committed to the long haul patience and discipline will be key.