It’s been a rough journey for the cryptocurrency market through 2022. By November the market was down by more than 70 percent from its previous high in November 2021. And just when things were going downhill, the FTX crash made them look even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many dips in the past. Each time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. However, in 2017, it broke the record and hit a record high of $19,600. Then, in 2018, the price was at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are typically followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more businesses and industries embracing it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations of the government
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes many investors are beginning to look for safe haven assets like cryptocurrency and gold. Because the global economic climate remains uncertain and uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. In the future, as more everyday people learn about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand it. As understanding and acceptance of crypto grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise 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 expands and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions, it could result in increased demand and higher prices.
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 store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stocks or real estate are rapidly expanding area of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a means of payment, it makes it easier for people to hold and use crypto, which can increase demand and price.
Will crypto be on the increase in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline is essential.