It’s been a difficult ride for the crypto market in 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. And just when things were going downhill, the FTX crash made them look even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke that record and reached a new highest of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke 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. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries embracing it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. And this growing use case could result in more people being involved in the market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for crypto. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of 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 and more industries are starting to explore how they can make use of blockchain technology, which could drive more investment and interest in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency 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 looking for safe haven investments like cryptocurrency and gold. Because the global economic climate is uncertain and uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to invest in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a method 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
These funds are state-owned investment vehicles, are beginning to look at 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.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify 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, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, it will make it easier for people to hold and use crypto, which could increase demand and price.
So, will crypto increase in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long haul patience and discipline is essential.