It’s been a difficult ride for the crypto market until 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were going downhill, the FTX crash turned things worse. So, will 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 rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that at the end of every 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 finally breaks through the resistance created by the market’s previous highest 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 progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and result in higher prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to invest in the crypto market. As more and more everyday people are educated about 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 crypto market grows increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created using blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to look at crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for people to buy and store cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher prices for crypto.
More adoption by merchants
In the event that more businesses start accepting crypto as a form of payment, it makes it easier for consumers to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. But with these factors to consider, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run patience and discipline is essential.