It’s been a tough ride for the crypto market until 2022. As of November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse and down, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips over the years. Each time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke the record and hit a record record high of $19,600. Then, 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, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. And this growing use case could lead to increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are starting to learn about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of 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 the provision of financial services built on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for people to buy and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it makes it easier for people to use and hold crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market will be able to see a rebound in 2023. For those looking to invest for the long run patience and discipline is crucial.