It’s been a tough journey for the cryptocurrency market in 2022. In November the market had dropped by more than 70 percent from the previous high at the end of November. Just when the market was getting worse and down, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips in the past. Every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low 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. And in 2020, the price broke that resistance, and reached a record highest of $68,000 in 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
Just like we’ve seen before, fall-offs are usually followed by a long bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people being involved in the market, which in turn could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more everyday people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can drive up prices.
scarecrow crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services created on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to show interest in crypto as a potential asset class. As more funds allocate a portion of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs for crypto increase, it will become easier for people to buy and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, this makes it easier for people to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market could be able to see a rebound in 2023. For those looking to invest for the long run patience and discipline will be key.