It’s been a tough journey for the cryptocurrency market until 2022. In November the market was down by more than 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to increasing participation in the market which could increase the price.
The rise in interest of institutions in crypto
In recent times we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused by the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. In the future, as more people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about it and comprehend it. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be built on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to explore crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto continue to increase, it will become easier for consumers to purchase and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset such as stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses accept crypto as a form of payment, it will make it more convenient for customers to use and hold crypto, which can 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 be able to see a rebound in 2023. If you’re committed to the long haul, being patient and disciplined will be key.