It’s been a difficult ride for the crypto market through 2022. As of November the market had dropped by 70% from its previous peak in November 2021. Just when the market was getting worse after the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. And every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching 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. In 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people being involved in the crypto market which could boost prices.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and could lead to higher prices.
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate is 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 people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows 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 higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, this will make it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency 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.