It’s been a difficult experience for the crypto market in 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were going downhill, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had 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 more than a year before hitting a low of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case can lead to more people getting involved in the market which could drive the prices up.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the market for crypto. As more and more people are educated about crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto it could result in more people buying and holding crypto, which can drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi expands 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 starting to accept crypto as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are beginning to look at crypto as an asset class. As more of these funds allocate a portion of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand, and thus higher rates for the crypto.
More adoption by merchants
As more and more businesses start accepting crypto as a form of payment, this will make it more convenient for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re committed to the long haul, being patient and disciplined is essential.