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. When things were looking down and 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 market for crypto, particularly Bitcoin has had many dips over the years. Each time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the 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 following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a long bull run, which eventually breaks through the resistance created by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and result in greater prices.
Government regulations
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable rules for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, potential of crypto assets will expand. This could result in more use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more people are educated about crypto and the best ways to invest in it this could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are beginning to accept crypto as a method of payment. This could result in increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are beginning to explore crypto as a potential asset class. As more of these funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use 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 that accept crypto continue to increase it will be more convenient for individuals to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it could result in a rise in demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this will make it more convenient for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects being considered, it’s possible that the crypto market could see a recovery in 2023. And for those who are committed to the long run patience and discipline is crucial.