It’s been a tough experience for the crypto market until 2022. By November, the market had dipped by 70 percent from its previous high at the end of November. When things were going downhill and down, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Each time, it’s rebounded with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every 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, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries adopting it, its usage 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 drive the prices up.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and result in greater 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 is likely to attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are starting to learn about and understand it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi continues to grow and more projects and platforms become available, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are now beginning to explore crypto as an asset class. As more funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, it makes it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could have a rebound by 2023. And for those who are looking to invest for the long-term, being patient and disciplined will be key.