It’s been a difficult journey for the cryptocurrency market until 2022. By November, the market had dipped by more than 70% from its previous peak at the end of November. And just when things were going downhill after the FTX crash turned them even worse. So, will 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 has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke that record and hit a record record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, the price broke that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people getting involved in the market and, in turn, increase the price.
The rise in interest of institutions in cryptocurrency
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the crypto market and lead to greater prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can utilize blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to participate in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance grows of crypto it could result in increasing numbers of people purchasing and holding crypto, which could increase prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto is growing increasing numbers of companies are starting to accept crypto as a method of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in cryptocurrency as a possible 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.
Use of crypto for international payments
One of the main advantages of crypto is its ability to make quick and inexpensive cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions it could result in increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto increase, it will become easier for consumers to purchase and keep cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this can lead to a higher demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more retailers begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects to consider, it’s likely that the crypto market will be able to see a rebound in 2023. If you’re in it for the long run, being patient and disciplined is crucial.