It’s been a rough journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was going downhill, the FTX crash turned things even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record peak of $68,000 in the month of November 2021. 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
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From finance to gaming cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto could lead to more people being involved in the market which could boost prices.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. As more and more everyday people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could increase prices.
crypto exchange without verification
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing as more and more businesses are beginning using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as an asset class. As more of these funds devote a percentage of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto 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 are used to represent ownership of an asset, such as stocks or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept cryptocurrency as a method of payment, it will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s likely that the cryptocurrency market will see a recovery in 2023. For those looking to invest for the long run patience and discipline is crucial.