It’s been a tough experience for the crypto market through 2022. In November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were going downhill after the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. Each time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a prolonged bull run that finally 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 adopting the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the crypto market and result in more expensive prices.
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive 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 beginning to get involved in the crypto market. In the future, as more people become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing increasing numbers of people are beginning to learn about and appreciate it. As understanding and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services built using blockchain technology. As DeFi expands and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto is growing, more and more companies are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto 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 that accept crypto continue to grow it will be more convenient for individuals to purchase and hold crypto, which will increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock is a fast-growing area of the crypto market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting crypto as a form of payment, this will make it more convenient for people to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market could be able to see a rebound in 2023. For those in it for the long-term patience and discipline will be key.