It’s been a rough experience for the crypto market through 2022. By November, the market had dipped by 70 percent from the previous high at the end of November. And just when things were getting worse and down, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Every time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before hitting a low of $150. But, in 2017, it broke that record and hit a record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve seen 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
Just like we’ve seen previously, dips tend to be followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming cryptocurrency is being utilized in many ways. And this growing use case could result in increasing participation in the crypto market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for crypto. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications 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 will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to grow. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the market for crypto. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing and holding crypto, which could increase prices.
crypto startups
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows financial services to be built using blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investments, are starting to show interest in crypto as an asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as real estate or stock is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses start accepting crypto as a means of payment, it will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market could be able to see a rebound in 2023. For those committed to the long run patience and discipline is crucial.