It’s been a difficult experience for the crypto market through 2022. As of November, the market had dipped by more than 70 percent from its previous high at the end of November. When things were getting worse and down, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. In 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, 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
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in 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 adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could result in more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on due to the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the crypto market. In the future, as more everyday people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could lead to increased demand and increased prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for consumers to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a form of payment, this will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those in it for the long haul Being patient and disciplined is essential.