It’s been a difficult experience for the crypto market through 2022. In November the market was down by more than 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance, crypto is being used 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 recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as gold and crypto. As the global economic situation is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing as more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying or holding cryptocurrency, and this can drive up prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi expands and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow it will be more convenient for people to buy and store crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, it will make it more convenient for consumers to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long run patience and discipline is crucial.