It’s been a rough journey for the cryptocurrency market through 2022. By November the market was down by more than 70% from its previous peak on November 20, 2021. Just when the market was looking down after the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Each time, it’s rebounded with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, history has shown 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 before, fall-offs are usually followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market which could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
As the market for crypto grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages 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 acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like gold and crypto. As the global economic situation is uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors, are also starting to participate in the crypto market. As more and more everyday people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing, more and more people are beginning to become aware about and understand it. As awareness and acceptance of crypto grows, this could lead to more people purchasing as well as holding the crypto that could raise prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased 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 form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase it will be more convenient for consumers to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing 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.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting crypto as a means of payment, it makes it easier for consumers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. For those committed to the long run patience and discipline will be key.