It’s been a tough ride for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high in November 2021. When things were looking down, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. In 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries adopting the technology, its use and acceptance is increasing. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide 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 utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will grow. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to participate in the market for crypto. With increasing numbers of people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand the concept. As the awareness and acceptance of crypto grows, it will lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows financial services to be created using blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are starting to explore crypto as a potential asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and hold cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that 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 can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers start accepting cryptocurrency as a method of payment, this will make it more convenient for consumers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are in it for the long run Being patient and disciplined is essential.