It’s been a rough experience for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from the previous high at the end of November. Just when the market was going downhill, the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. Every time, it has bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, 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 typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. And this growing use case can lead to increasing participation in the market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the potential in crypto currencies. This increased interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market is maturing as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world 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 people who are interested in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently 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 understand the concept. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting crypto as a means of payment, this will make it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long run patience and discipline will be key.