It’s been a tough experience for the crypto market through 2022. In November the market was down by more than 70% from its previous peak at the end of November. When things were going downhill after the FTX crash made them look more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new record high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services built upon blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase, it will become easier for people to buy and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market could have a rebound by 2023. And for those who are looking to invest for the long-term, being patient and disciplined is essential.