It’s been a tough journey for the cryptocurrency market in 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of 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 a full year, reaching a low of $150. In 2017, it broke the record and hit a record highest of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through that resistance and reached a new highest of $68,000 in November 2021. Then, 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 previously, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people being involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to more expensive prices.
Government regulations
As the market for crypto is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain offers a variety of potential use cases that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying as well as holding the crypto that can raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to explore crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could lead to increased demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to make fast and cheap 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.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
In the event that more businesses begin accepting crypto as a form of payment, it makes it easier for consumers to use and hold crypto, which could drive up demand and prices.
So, will crypto increase in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market will have a rebound by 2023. And for those who are committed to the long-term patience and discipline is crucial.