It’s been a difficult experience for the crypto market until 2022. In November the market was down by more than 70% from its previous peak at the end of November. Just when the market was looking down and down, the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. Every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over 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, and it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips are typically followed by a prolonged bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions can bring stability to the crypto market and could lead to greater prices.
As the crypto market continues to mature as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are starting to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi expands 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 continues to grow, more and more companies are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the main advantages of crypto is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for individuals to purchase and keep crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
In the event that more retailers accept cryptocurrency as a method of payment, this will make it easier for customers to use and hold crypto, which can increase demand and price.
So, will crypto increase in 2023? The only way to know is time. But with these factors to consider, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long haul patience and discipline will be key.