It’s been a rough ride for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high on November 20, 2021. And just when things were going downhill after the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. And every time, it’s rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are usually followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in many ways. The growing popularity of crypto can lead to more people being involved in the market which could boost prices.
Increased institutional interest in crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. This increased interest from institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. 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, is a broad range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can make use of blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of crypto assets will increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic and other factors, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the cryptocurrency market. With increasing numbers of people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows it could result in more people buying or holding cryptocurrency, and this could increase prices.
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Financial decentralization (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 projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow as more and more businesses are starting accepting crypto payments as a form of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
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 crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses are beginning to make use of crypto for international transactions, it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto continue to increase, it will become easier for people to buy and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could lead to increased demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting crypto as a means of payment, this makes it easier for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could have a rebound by 2023. And for those who are in it for the long-term patience and discipline will be key.