It’s been a tough journey for the cryptocurrency market in 2022. By November, the market had dipped by 70 percent from the previous high in November 2021. When things were looking down and down, the FTX crash turned them even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. And every time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017, it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This pattern can be seen 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 companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. This growing demand can lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature as more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to more people buying and holding crypto, which could drive up prices.
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to show interest in crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be easier for individuals to purchase and store crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership of an asset, such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, this 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 start accepting crypto as a means of payment, it makes it easier for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long run, being patient and disciplined is crucial.