It’s been a tough ride for the crypto market until 2022. As of November the market was down by 70 percent from the previous high on November 20, 2021. Just when the market was looking down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke the record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Then, 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
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually overcomes the resistance set by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could result in increasing participation in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of 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.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend it. As the awareness and acceptance of crypto grows it could result in more people purchasing and holding crypto, which can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are beginning to explore crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase, it will become easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, like stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
As more and more retailers start accepting cryptocurrency as a method of payment, it will make it more convenient for customers to utilize and store 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 likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long-term, being patient and disciplined is crucial.