It’s been a tough journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was going downhill, the FTX crash turned things even worse. 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 has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke the record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us 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 are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in 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 more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could lead to more people getting involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and result in higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can utilize blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. As more and more people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance grows of crypto it could result in more people buying as well as holding the crypto that can drive up prices.
crypto web hosting
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are beginning to accept crypto as a form 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 government-owned investment vehicles, are starting to explore crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals 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 ATMs that accept crypto increase it will be easier for individuals to purchase and store crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or 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 could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept cryptocurrency as a method of payment, it will make it easier for customers to hold and use crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long haul patience and discipline is essential.