It’s been a tough journey for the cryptocurrency market in 2022. As of November the market was down by 70% from its previous peak on November 20, 2021. Just when the market was going downhill and down, the FTX crash made them look worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for more than a year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. But history shows us 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 prolonged bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies 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. The growing popularity of crypto could lead to increasing participation in the crypto market and, in turn, boost prices.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond just financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that could raise prices.
house of obsidian crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built on top of blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and hold cryptocurrency, which can increase demand and price.
Development of security tokens
Security tokens, or digital assets that represent ownership of an asset, like real estate or stock are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a means of payment, it will make it easier for consumers to use and hold crypto, which could drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long run Being patient and disciplined will be key.