It’s been a tough ride for the crypto market in 2022. By November the market had dropped by more than 70 percent from the previous high on November 20, 2021. And just when things were looking down after the FTX crash turned them 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 rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the beginning 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 adoption and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of people become aware of crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature increasing numbers of people are beginning to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are starting to explore crypto as an 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.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a means of payment, this will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term Being patient and disciplined is essential.