It’s been a difficult journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from the previous high on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips over the years. Each time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a lengthy bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the market for crypto. In the future, as more everyday people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for people to buy and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more businesses begin accepting crypto as a means of payment, this makes it easier for customers to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could have a rebound by 2023. And for those who are in it for the long haul patience and discipline will be key.