It’s been a difficult ride for the crypto market through 2022. As of November, the market had dipped by 70 percent from its previous high in November 2021. When things were going downhill after the FTX crash turned things even worse. 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. Every time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the crypto market and, in turn, increase the price.
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 and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the crypto market and lead to more expensive prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to 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 crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. 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.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could increase demand and higher prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it will make it easier for customers to hold and use 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 have a rebound by 2023. For those in it for the long haul, being patient and disciplined is essential.