It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market had dropped by more than 70 percent from the previous high at the end of November. Just when the market was going downhill after the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had many dips in the past. Each time, it’s rebounded with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This is evident in more than 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 taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and could lead to higher prices.
Government regulations
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. In the future, as more people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance grows of crypto it could result in more people purchasing as well as holding the crypto that could increase prices.
crypto sell order
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are state-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s increase it will be easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, this makes it easier for consumers to utilize and store crypto, which could boost demand and increase prices.
Will crypto be on the rise in 2023? Only time will tell. With these things to consider, it’s likely that the crypto market will have a rebound by 2023. If you’re committed to the long run, being patient and disciplined is crucial.