It’s been a rough journey for the cryptocurrency market until 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned things more dire. 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 drops in the past. Each time, it has bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017, it broke the record, and hit a new record high of $19,600. In 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve seen another dip. 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 before, fall-offs are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to increasing participation in the crypto market and, in turn, 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 cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and result in greater prices.
Government regulations
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. With increasing numbers of people become aware of crypto and how to invest 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 as more and more people are starting to learn about it and comprehend it. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing increasing numbers of companies 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.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase it will be more convenient 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 in an asset like stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a form of payment, this will make it easier for consumers to use and hold crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined is essential.