It’s been a difficult journey for the cryptocurrency market in 2022. By November the market had dropped by more than 70 percent from the previous high in November 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 its fair share of dips in the past. And every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. In 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could result in more people being involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more everyday people are educated about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing as more and more businesses are beginning to accept crypto as a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to look at crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase it will be easier for people to buy and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants accept crypto as a means of payment, it makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long run, being patient and disciplined is essential.