It’s been a tough journey for the cryptocurrency market until 2022. By November the market was down by more than 70 percent from the previous high at the end of November. Just when the market was looking down and down, the FTX crash turned things even 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 over the years. Every time, it’s bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in 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 embracing it, its usage 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, which in turn could boost prices.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just 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, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As understanding and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are starting accepting crypto payments as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a means of payment, this will make it easier for customers to use and hold crypto, which can drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul patience and discipline will be key.