It’s been a rough journey for the cryptocurrency market through 2022. In November the market was down by more than 70% from its previous peak on November 20, 2021. Just when the market was going downhill after the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. Every time, it’s rebounded by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips 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 not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are 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 more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased 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 participate in the market for crypto. As more and more people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand it. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built using blockchain technology. As DeFi grows and more projects and platforms come online, this 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 beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned investment vehicles, are beginning to look at crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto increase it will be more convenient for people to buy and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? Only time will tell. But with these factors in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long haul, being patient and disciplined is essential.