It’s been a rough ride for the crypto market through 2022. In November the market was down by 70 percent from its previous high on November 20, 2021. And just when things were going downhill, the FTX crash turned things even 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. Every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, 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
As we’ve seen before, fall-offs are typically followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in many ways. This growing demand could result in more people being involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like bitcoin and even gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to get involved in the cryptocurrency market. As more and more everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market 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 everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to show interest in crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase it will be more convenient for people to buy and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more retailers start accepting cryptocurrency as a method of payment, this will make it easier for customers to use and hold crypto, which can drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re committed to the long haul Being patient and disciplined will be key.