It’s been a difficult experience for the crypto market until 2022. By November the market had dropped by more than 70 percent from the previous high at the end of November. Just when the market was going downhill, the FTX crash made them look more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017 it broke that 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 through that resistance, and reached a record high of $68,000 in November 2021. And 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 are usually followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in more people being involved in the crypto market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are now exploring the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This could increase investment and enthusiasm in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could lead to more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to get involved in the market for crypto. With increasing numbers of people learn about cryptocurrency and investing in it This could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are starting to learn about and understand it. As understanding and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could drive up prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi expands and more projects and platforms are launched, it could result in increased use and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
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 cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase, it will become easier for people to buy and keep crypto, which could drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
In the event that more retailers start accepting crypto as a means of payment, this will make it more convenient for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will be able to see a rebound in 2023. If you’re committed to the long run patience and discipline is crucial.