It’s been a tough experience for the crypto market until 2022. By November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low 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 peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to 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 cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it This could result in an increase in demand and consequently 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 the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
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 projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing as more and more businesses are starting using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a means of payment, this will make it more convenient for customers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined will be key.