It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by 70 percent from its previous high in November 2021. And just when things were looking down, the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017, it broke that record and hit a record high of $19,600. In 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create 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 underlies many cryptocurrency, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. As more and more everyday people are educated about crypto and how 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, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that can raise prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase, it will become easier for consumers to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a form of payment, it makes it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long run patience and discipline is essential.