It’s been a rough experience for the crypto market through 2022. In November, the market had dipped by 70% from its previous peak on November 20, 2021. When things were getting worse, the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Each time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest 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 the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand can lead to more people getting involved in the market which could boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase 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 possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are starting to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the market for crypto. As more and more people are educated about crypto and the best ways 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 crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for consumers to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants start accepting cryptocurrency as a method of payment, it will make it easier for people to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? It’s only time to find out. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined will be key.