It’s been a difficult journey for the cryptocurrency market through 2022. By November the market was down by more than 70 percent from its previous high on November 20, 2021. When things were going downhill, the FTX crash made them look even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips over the years. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a lengthy bull run that finally surpasses the resistance created by the previous market’s highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries embracing it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could lead to increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in cryptocurrency
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to higher prices.
Regulations from the Government
As the crypto market continues to mature as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of crypto assets will continue to expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing 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, which allows financial services to be developed using blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset such as stock or real estate are rapidly expanding area of the crypto market. Since more and more security tokens will be issued and traded, it could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants begin accepting crypto as a means of payment, this makes it easier for people to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors being considered, it’s possible that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long haul Being patient and disciplined is crucial.