It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash made them look even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips over the years. Each time, it’s rebounded with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that after each 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 lengthy bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will expand. This could lead to greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. With increasing numbers of everyday people become aware of 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 is maturing as more and more people are starting to learn about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created using blockchain technology. As DeFi expands and more platforms and projects come online, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are state-owned investments, are now beginning to show interest in crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its ability to facilitate 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
As the number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a means of payment, this makes it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul, being patient and disciplined is crucial.