It’s been a tough journey for the cryptocurrency market until 2022. In November, the market had dipped by 70 percent from its previous high on November 20, 2021. And just when things were getting worse and down, 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 had its fair share of dips in the past. And every time, it’s rebounded by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. But, in 2017 it broke that record and reached a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance and reached a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. 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
As we’ve seen before, fall-offs are typically followed by a prolonged bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto can lead to increasing participation in the market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and lead to more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will grow. This could lead to more adoption and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more everyday people are educated about crypto and the best ways to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to become aware about and appreciate it. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could drive up prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a form of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is its ability to facilitate fast and cheap 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.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and store crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as real estate or stock is a fast-growing segment of the cryptocurrency market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more merchants begin accepting crypto as a form of payment, it will make it more convenient for people to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. But with these factors to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. For those committed to the long run Being patient and disciplined will be key.