It’s been a difficult experience for the crypto market through 2022. In November the market was down by 70 percent from its previous high at the end of November. And just when things were going downhill, the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. 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
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries embracing 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 can lead to more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and understand it. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
sheep token crypto
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and store crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants start accepting crypto as a means of payment, it will make it more convenient for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, will crypto rise in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline will be key.