It’s been a rough journey for the cryptocurrency 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, the FTX crash made them look worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips over the years. Every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. However, the past has proven that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed in the past, dips tend to be followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This could help attract more investors as well as increase the acceptance of crypto in general.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors, more and more investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, also known as individual investors are also beginning to invest in the cryptocurrency market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of crypto grows, this could lead to more people buying or holding cryptocurrency, and this could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables financial services to be developed using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are state-owned instruments for investing, are beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could lead to increased demand and higher prices.
Use of crypto for international payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to increase it will be more convenient for people to buy and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it can lead to a higher demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants accept cryptocurrency as a method of payment, this will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re in it for the long haul patience and discipline will be key.