It’s been a tough journey for the cryptocurrency market through 2022. In November the market was down by more than 70 percent from the previous high in November 2021. And just when things were going downhill and down, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Each time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people getting involved in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to more expensive prices.
Government regulations
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets like gold and crypto. Because the global economic climate remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more people learn about crypto and how 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 continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing or holding cryptocurrency, and this could drive up prices.
rose crypto price
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are starting to explore crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, it could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow it will be easier for people to buy and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, this will make it easier for customers to utilize and store crypto, which could drive up demand and prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things 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 haul patience and discipline will be key.