It’s been a rough experience for the crypto market until 2022. In November the market had dropped by more than 70 percent from the previous high on November 20, 2021. Just when the market was going downhill, the FTX crash made them look more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips in the past. And every time, it’s bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, history has shown 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 previously, dips are usually followed by a lengthy bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to increasing participation in the crypto market which could boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more 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 more demand for crypto as well as higher prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to invest 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 lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of crypto grows, it will lead to more people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services built using blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to look at crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, it could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow, it will become easier for people to buy and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, this makes it easier for consumers to use and hold crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the crypto market will see a recovery in 2023. If you’re looking to invest for the long run patience and discipline will be key.