It’s been a tough journey for the cryptocurrency market through 2022. As of November, the market had dipped by more than 70 percent from its previous high at the end of November. Just when the market was going downhill after the FTX crash turned things worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Every time, it’s bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017, it broke the record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in more people being involved in the market which could increase the price.
Increased institutional interest in crypto
In recent years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and result in higher prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range 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 benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors many investors are looking for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could increase prices.
what is scalping in crypto
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a means of payment, this makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long run, being patient and disciplined is crucial.