It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. Every time, it has bounced back with a big rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and hit a record highest of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. But history shows 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 lengthy bull run that finally overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in 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 increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people are educated about crypto and the best ways to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance grows of crypto, it will lead to more people buying and holding crypto, which can drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed using blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are beginning to explore crypto as an asset class. As more of these funds dedicate a part of their portfolio to crypto, this could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of 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 ATMs for crypto continue to increase it will be easier for consumers to purchase and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a form of payment, it makes it easier for people to hold and use crypto, which can increase demand and price.
So, is crypto likely to increase in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will have a rebound by 2023. And for those who are committed to the long-term, being patient and disciplined is essential.