It’s been a difficult experience for the crypto market through 2022. By November the market was down by more than 70% from its previous peak at the end of November. And just when things were getting worse, the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips over the years. And every time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in more demand for crypto as well as increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the crypto market. In the future, as more people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and understand it. As understanding and acceptance grows of crypto, this could lead to more people buying as well as holding the crypto that can raise prices.
vvs crypto chart
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be developed upon blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of crypto is the ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto increase it will be easier for consumers to purchase and keep crypto, which will increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, this will make it easier for consumers to use and hold crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. And for those who are in it for the long haul, being patient and disciplined will be key.