It’s been a difficult journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. And just when things were getting worse and down, the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. And every time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through that resistance and hit 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 after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto could result in increasing participation in the market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and understand it. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can increase prices.
crypto influencer marketing
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows financial services to be built upon blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are starting using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants begin accepting crypto as a means of payment, it will make it more convenient for people to utilize and store crypto, which can drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long run Being patient and disciplined will be key.