It’s been a tough journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. When things were looking down and down, the FTX crash turned things even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Every time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. 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 tend to be followed by a long bull run that eventually overcomes the resistance set 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
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries adopting it, its usage and acceptance is rising. From finance to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and result in higher prices.
As the market for crypto is maturing, governments around the world are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which can raise prices.
hero crypto price prediction
Decentralized finance (DeFi) is an emerging area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to show interest in crypto as a potential asset class. As more of these funds allocate a portion of their portfolio to crypto, this could increase demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is its ability to facilitate fast and cheap cross-border payments. 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.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for people to buy and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate is a fast-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 costs for cryptocurrency.
More adoption by merchants
As more and more merchants accept crypto as a means of payment, it will make it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul, being patient and disciplined is crucial.