It’s been a rough experience for the crypto market through 2022. As of November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were looking down and down, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Every time, it has bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record highest of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a long bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than 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 more businesses and industries taking to the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case can lead to increasing participation in the crypto market, which in turn could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about and appreciate it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
starving use crypto to sidestep failing
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of 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 crypto ATM’s 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 sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, this makes it easier for customers to use and hold cryptocurrency, which will increase demand and price.
So, will crypto rise in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long run patience and discipline will be key.