It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from the previous high on November 20, 2021. When things were going downhill and down, the FTX crash turned them even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it has bounced back with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. But, in 2017 it broke that record and hit a record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips are typically followed by a prolonged bull run that finally overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in a variety of ways. This growing demand can lead to more people being involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and could lead to greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets such as cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, also known as individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows, more and more people are beginning to learn about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services built upon blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are starting using crypto to be a means of payment. This could result in increased usage of crypto in daily transactions and higher prices.
More investment from sovereign wealth funds
These funds are owned by the state as instruments for investing, are now beginning to show interest in crypto as an asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for consumers to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for people to hold and use crypto, which can boost demand and increase prices.
So, is crypto likely to rise in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long haul Being patient and disciplined will be key.