It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash made them look more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Each time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through that resistance and hit a new highest of $68,000 in 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
As we’ve seen before, fall-offs tend to be followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could lead to increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can utilize blockchain technology. This will increase investment and enthusiasm in crypto.
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 increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. In the future, as more everyday people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to become aware about and appreciate it. As awareness and acceptance grows of crypto it could result in more people buying or holding cryptocurrency, and this can increase prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built using blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are beginning to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of retailers begin accepting crypto as a means of payment, it makes it easier for consumers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long haul, being patient and disciplined will be key.