It’s been a rough journey for the cryptocurrency market until 2022. By November the market was down by 70 percent from the previous high at the end of November. When things were going downhill after the FTX crash made them look even 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 over the years. Each time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. But history shows us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more businesses and industries taking to the technology, its use and acceptance is increasing. From banking to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could result in more people getting involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities of crypto assets. The increased interest of institutions can bring stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As progress is made in areas such as security and scalability, the potential of crypto assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors, are also starting to get involved in the market for crypto. In the future, as more everyday people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of 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 purchasing as well as holding the crypto that can increase prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its capability to perform fast and cheap cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased demand and higher costs.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for people to buy and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. With the increasing number of security tokens being created and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept cryptocurrency as a method of payment, this makes it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to increase in 2023? The only way to know is time. With these things being considered, it’s likely that the cryptocurrency market will have a rebound by 2023. For those committed to the long haul patience and discipline is crucial.