It’s been a rough ride for the crypto market until 2022. By November the market was down by 70% from its previous peak at the end of November. 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 market for crypto, particularly Bitcoin has experienced many dips over the years. And every time, it has bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, it was trading at $3,100. In 2020, it broke through that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high 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 progressed a lot in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could lead to increasing participation in the market and, in turn, drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to learn about it and comprehend it. As awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services created on top of blockchain technology. As DeFi grows and more platforms and projects come online, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses start to utilize 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 continue to increase it will be more convenient for consumers to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a form of payment, it will make it more convenient for people to use and hold crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long haul, being patient and disciplined is essential.