It’s been a difficult journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70 percent from the previous high at the end of November. And just when things were looking down and down, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it’s rebounded with a big rise.
For example, 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 reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Government regulations
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the cryptocurrency market. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase, it will become easier for consumers to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers accept cryptocurrency as a method of payment, it makes it easier for consumers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long-term Being patient and disciplined is crucial.