It’s been a rough journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70 percent from the previous high in November 2021. Just when the market was getting worse, the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many drops in the past. And every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. In 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us 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 lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern 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 the last few years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the crypto market which could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and lead to higher prices.
Government regulations
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions 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 people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and understand the concept. As awareness and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services built upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investments, are starting to explore cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of merchants begin accepting crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which can drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are committed to the long haul, being patient and disciplined will be key.