It’s been a tough ride for the crypto market until 2022. In November the market had dropped by 70 percent from its previous high at the end of November. Just when the market was getting worse, the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Each time, it’s rebounded with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips are usually followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This pattern is evident not only in 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 companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are starting to create more favorable regulations for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty 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 is uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to get involved in the market for crypto. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance grows of crypto, this could lead to more people purchasing as well as holding the crypto that could raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be created using blockchain technology. As DeFi continues to grow and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the market for crypto grows as more and more businesses are beginning using crypto to be a method of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto 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 continue to increase it will be more convenient for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of merchants accept cryptocurrency as a method of payment, it makes it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to increase in 2023? Only time will tell. But with these factors in mind, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re in it for the long-term patience and discipline is crucial.