It’s been a rough journey for the cryptocurrency market in 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. And just when things were getting worse and down, the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips in the past. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are usually followed by a long bull run, which eventually overcomes the resistance set 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 technology and cryptography have progressed a lot in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could result in increasing participation in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
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. As more and more people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are starting to learn about and appreciate it. As awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing as well as holding the crypto that could increase prices.
crypto branding
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to explore crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be more convenient for people to buy and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing sector of the crypto market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, it will make it more convenient for consumers to utilize and store crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. If you’re committed to the long-term Being patient and disciplined will be key.