It’s been a tough journey for the cryptocurrency market until 2022. By November the market had dropped by more than 70% from its previous peak on November 20, 2021. When things were going downhill after the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s bounced back with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. And 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
Just like we’ve seen previously, dips tend to be followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s 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 the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to more people getting involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing, governments around the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will grow. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain it could result in 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, or individual investors, are also starting to invest in the crypto market. With increasing numbers of people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this could drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are starting using crypto to be a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to explore crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
In the event that more merchants accept crypto as a form of payment, this will make it more convenient for consumers to utilize and store crypto, which could increase demand and price.
Will crypto be on the increase in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could have a rebound by 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.