It’s been a tough journey for the cryptocurrency market until 2022. In November the market had dropped by more than 70 percent from its previous high in November 2021. Just when the market was getting worse after 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 seen its fair share of dips in the past. Every time, it’s bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. 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 usually followed by a lengthy 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 other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From finance to gaming, crypto is being used in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the crypto market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the crypto market grows and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors and boost the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can benefit from blockchain technology, which could drive more investment and interest in crypto.
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 scalability and security, the potential of crypto assets will grow. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets like gold and crypto. Since the economic outlook for the world is uncertain it could result in increased 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, also known as individual investors are also beginning to get involved in the cryptocurrency market. As more and more people learn about crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing as more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of crypto grows, it will lead to more people buying and holding crypto, which could drive up prices.
Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the crypto market is growing as more and more businesses are beginning using crypto to be a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are government-owned instruments for investing, are starting to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, this could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses are beginning to make use of cryptocurrency for international transactions it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for individuals to purchase and store cryptocurrency, which can boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership in an asset like real estate or stock, are a rapidly growing sector 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 prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it will make it more convenient for people to use and hold cryptocurrency, which will drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long-term, being patient and disciplined will be key.