It’s been a rough journey for the cryptocurrency market through 2022. In November the market had dropped by 70% from its previous peak at the end of November. When things were looking down, the FTX crash turned them even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017, it broke the record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, the price broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also 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 better companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people being 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 seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for crypto. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto grows, more and more people are beginning to learn about and understand the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing and holding crypto, which could raise prices.
foam crypto price
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more projects and platforms become available, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as 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 result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase, it will become easier for consumers to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this will make it more convenient for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market could have a rebound by 2023. And for those who are looking to invest for the long-term patience and discipline is essential.