It’s been a difficult experience for the crypto market until 2022. By November the market was down by more than 70% from its previous peak at the end of November. When things were going downhill after 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 had many dips over the years. And every time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. 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 previously, dips are typically followed by a lengthy 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
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. This growing demand could lead to increasing participation in the market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. 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 the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as gold and crypto. As the global economic situation is 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 crypto. Retail investors, also known as individual investors are also beginning to get involved in the crypto market. In the future, as more people become aware of crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make international payments
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
The number of ATMs for crypto continue to grow it will be easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more merchants begin accepting cryptocurrency as a method of payment, it makes it easier for people to utilize and store cryptocurrency, which will drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. If you’re committed to the long-term, being patient and disciplined will be key.