It’s been a difficult ride for the crypto market in 2022. In November the market was down by 70 percent from the previous high at the end of November. And just when things were looking down after the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it’s bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017 it broke that record and reached a new record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows 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 lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in many ways. And this growing use case could result in increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven investments like bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors, are also starting to participate in the crypto market. In the future, as more everyday people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can increase prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of 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.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers start accepting crypto as a form of payment, it makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long run patience and discipline will be key.