It’s been a difficult ride for the crypto market in 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was going downhill and down, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. And every time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, the price broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen 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 before, fall-offs are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in the last few years. With more and better companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could lead to more people being involved in the crypto market which could drive the prices up.
The rise in interest of institutions in crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the market for crypto. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing as well as holding the crypto that could increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investment vehicles, are now beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s increase, it will become easier for people to buy and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants accept cryptocurrency as a method of payment, it will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto increase in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long run patience and discipline will be key.