It’s been a tough ride for the crypto market until 2022. In November, the market had dipped by 70 percent from the previous high on November 20, 2021. When things were looking down, the FTX crash turned them even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Each time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. In 2017, it broke the record and hit a record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Then, just like that we’ve witnessed another drop. However, history has shown 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 typically followed by a lengthy bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography 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 banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for crypto. This will help draw more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership in an asset like stocks or real estate, are a rapidly 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 thus higher rates for the crypto.
More adoption by merchants
As more and more merchants begin accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold cryptocurrency, which will drive up demand and prices.
Will crypto be on the increase in 2023? The only way to know is time. But with these factors to consider, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline will be key.