It’s been a difficult ride for the crypto market until 2022. By November the market was down by more than 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of drops in the past. Every time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017, it broke the record and hit a record high of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a prolonged bull run that finally breaks through the resistance created by the previous high price. This is evident 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 more companies and industries embracing the technology, its use and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market which could drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to expand. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the crypto market. With increasing numbers of everyday people are educated 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 is maturing as more and more people are beginning to become aware about and understand it. As understanding and acceptance grows of crypto, it will lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services built upon blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing increasing numbers of companies are beginning to accept crypto as a form of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore cryptocurrency as a possible asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs for crypto increase it will be easier for individuals to purchase and keep cryptocurrency, which can increase demand and price.
Security tokens are developed for development
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a form of payment, it will make it more convenient for customers to use and hold cryptocurrency, which will boost demand and increase prices.
Will crypto be on the rise in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are committed to the long-term, being patient and disciplined is crucial.