It’s been a rough experience for the crypto market until 2022. By November, the market had dipped by 70% from its previous peak in November 2021. Just when the market was looking down and down, the FTX crash turned things even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Each time, it’s rebounded with a huge increase.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. However, history has shown us 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 in the past, dips are typically followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could lead to more people being involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and could lead to more expensive prices.
As the market for crypto grows and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. As more and more everyday people learn about crypto and how 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 market for crypto continues to mature increasing numbers of people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could drive up prices.
crypto on ramps
Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services created using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Cryptocurrency is used for payment across borders
One of the major benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people 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
As the number of ATMs for crypto increase, it will become easier for people to buy and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers accept crypto as a form of payment, this makes it easier for people to hold and use crypto, which can increase demand and price.
Will crypto be on the rise in 2023? It’s only time to find out. With these things in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are looking to invest for the long haul patience and discipline is crucial.