It’s been a difficult journey for the cryptocurrency market until 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was getting worse, the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. Each time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new highest of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through that resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a long bull run, which eventually surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a myriad of ways. This growing demand could lead to increasing participation in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent years we’ve witnessed a rising demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to greater prices.
Regulations of the government
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in increased demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the cryptocurrency market. In the future, as more everyday people become aware of crypto and the best ways to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market continues to mature as more and more people are beginning to become aware about and appreciate the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows financial services to be created on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to show interest in crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could increase demand and increased prices.
Utilization of crypto to make international payments
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
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 keep crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, or 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, it could result in a rise in demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it makes it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul, being patient and disciplined is crucial.