It’s been a rough experience for the crypto market through 2022. By November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were getting worse, the FTX crash turned them even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. And every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. In 2017, it broke the record, and hit a new highest of $19,600. In 2018, the price was at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually overcomes the resistance set by the market’s previous highest 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 made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could result in more people being involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the crypto market. With increasing numbers of everyday people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows as more and more people are beginning to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which can raise prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi expands and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages 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 costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants start accepting cryptocurrency as a method of payment, this makes it easier for customers to hold and use cryptocurrency, which will drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could see a recovery in 2023. And for those who are in it for the long run patience and discipline will be key.