It’s been a rough journey for the cryptocurrency market through 2022. In November the market was down by 70 percent from the previous high at the end of November. Just when the market was going downhill after the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of dips in the past. Each time, it’s rebounded with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke the record and hit a record high of $19,600. In 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. 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 tend to be followed by a prolonged bull run that eventually surpasses the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions can bring stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This will increase investment and enthusiasm in crypto.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
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 crypto grows, this could lead to more people buying or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built using blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market is growing, more and more companies are beginning to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
More 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 devote a percentage of their portfolio to crypto, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for people to buy and hold crypto, which will 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 real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a form of payment, it makes it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to increase in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market could 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.