It’s been a tough journey for the cryptocurrency market until 2022. In November the market was down by 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. Each time, it has bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record high of $68,000 in November 2021. And just like that, we’ve had another dip. 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 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 pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and could lead to more expensive prices.
Government regulations
As the crypto market is maturing, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused by the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more everyday people are educated about cryptocurrency and investing 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 grows as more and more people are beginning to become aware about and appreciate the concept. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that can drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning using crypto to be a means 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
Sovereign wealth funds, which are government-owned investments, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their portfolio to crypto, this could increase demand and increased prices.
Use of crypto for international payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to grow it will be 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 of an asset, like stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants accept crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which can boost demand and increase prices.
So, will crypto increase in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market could see a recovery in 2023. If you’re looking to invest for the long haul patience and discipline will be key.