It’s been a rough experience for the crypto market until 2022. By November the market had dropped by more than 70 percent from its previous high at the end of November. When things were going downhill and down, the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of drops in the past. Every time, it has bounced back with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, it broke through the resistance, and reached a record high of $68,000 in 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 before, fall-offs tend to be followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From gaming to finance 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.
Increased institutional interest in crypto
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused through the COVID-19 pandemic and other factors many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and 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 get involved in the crypto market. As more and more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created upon 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 crypto market is growing, more and more companies are beginning using crypto to be a means of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and higher prices.
Use of crypto for international payments
One of the biggest benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a form of payment, it will make it more convenient for people to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long-term, being patient and disciplined is crucial.