It’s been a difficult experience for the crypto market until 2022. By November the market was down by 70% from its previous peak at the end of November. When things were getting worse after the FTX crash turned them more dire. 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 drops in the past. Every time, it’s rebounded with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. In 2018, the price was 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 witnessed another drop. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips tend to be followed by a prolonged bull run that eventually breaks through 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
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. And this growing use case could lead to more people being involved in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Regulations of the government
As the crypto market is maturing, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of the majority of cryptocurrencies, blockchain has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused through the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain it could result in 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 even individual investors are also beginning to invest in the cryptocurrency market. In the future, as more people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market continues to mature, more and more people are beginning to learn about and understand the concept. As understanding and acceptance of crypto grows it could result in more people buying and holding crypto, which could drive up prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows the provision of financial services developed upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a form of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as government-owned instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s increase, it will become easier for people to buy and store crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership in an asset like real estate or stock, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, it can lead to a higher demand and higher rates for the crypto.
A greater adoption rate by merchants
As more and more businesses start accepting crypto as a form of payment, this makes it easier for people to utilize and store crypto, which can drive up demand and prices.
So, will crypto rise in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term patience and discipline is crucial.