It’s been a difficult ride for the crypto market until 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. And just when things were looking down, the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips over the years. Every time, it has bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017, it broke the record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming the use of crypto is increasing in many ways. This growing demand could lead to more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for 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 for crypto-based assets. This increased interest from institutions can bring stability to the market for crypto and result in higher prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This is likely to attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology. This will increase investment and enthusiasm in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could result in more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. As more and more people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature increasing numbers of people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services built using blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, this could increase demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow, it will become easier for individuals to purchase and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, this will make it easier for consumers to utilize and store crypto, which can increase demand and price.
So, will crypto increase in 2023? Only time will tell. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long haul patience and discipline is crucial.