It’s been a difficult ride for the crypto market until 2022. As of November, the market had dipped by more than 70 percent from its previous high in November 2021. Just when the market was getting worse after the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. And every time, it has bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the crypto market. As more and more people are educated about cryptocurrency and investing in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, it will lead to more people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services built 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.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to explore crypto as a potential asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to grow, it will become easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of 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 can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
As more and more retailers begin accepting crypto as a means of payment, this makes it easier for consumers to hold and use crypto, which can drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. With these things to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long run, being patient and disciplined is crucial.