It’s been a rough 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. 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 experienced many drops in the past. Each time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke the record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to invest in the market for crypto. With increasing numbers of people become aware of 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 market for crypto grows, more and more people are beginning to learn about it and comprehend it. As awareness and acceptance of crypto grows it could result in more people purchasing or holding cryptocurrency, and this can drive up prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built upon blockchain technology. As DeFi expands 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 is growing increasing numbers of companies are starting using crypto to be a method of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
With the amount of crypto ATM’s continue to increase, it will become easier for people to buy and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, this will make it easier for people to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined is essential.