It’s been a rough journey for the cryptocurrency market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were getting worse and down, the FTX crash made them look even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Every time, it’s bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the potential in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create 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 is the basis of the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
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 crypto assets will expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting 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 an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are beginning to become aware about and understand the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
pr crypto services
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as a method 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 state-owned investment vehicles, are starting to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be easier for consumers to purchase and store cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
In the event that more businesses begin accepting cryptocurrency as a method of payment, it will make it easier for people to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to increase in 2023? It’s only time to find out. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline is essential.