It’s been a rough ride for the crypto market until 2022. By November, the market had dipped by 70 percent from the previous high at the end of November. When things were getting worse, the FTX crash made them look worse. The question is, can 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. Every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in more than Bitcoin but also in 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 the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in many ways. This growing demand could result in increasing participation in the crypto market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could bring more stability to the crypto market and result in higher prices.
As the crypto market continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about it and comprehend it. As awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to explore crypto as an asset class. As more funds devote a percentage of their assets to digital currencies, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be easier for people to buy and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting crypto as a form of payment, this makes it easier for consumers to utilize and store cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market will be able to see a rebound in 2023. For those in it for the long-term patience and discipline is essential.