It’s been a tough journey for the cryptocurrency market in 2022. As of November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was looking down, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Every time, it’s bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, 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 that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. This growing demand could result in more people getting involved in the crypto market which could increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to establish more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of people are educated about crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
buying crypto on sofi
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning using crypto to be 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
The sovereign wealth fund, also known as state-owned investments, are starting to show interest in crypto as a potential asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Utilization of crypto to make international payments
One of the biggest benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could lead to increased demand and higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long-term, being patient and disciplined is essential.