It’s been a rough ride for the crypto market until 2022. By November the market was down by more than 70 percent from the previous high in November 2021. When things were looking down and down, the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record high of $68,000 in 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
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This is evident in more than 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 better companies and industries taking to it, its usage and acceptance is growing. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could result in more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the potential for crypto-based assets. This increased interest from institutions could bring more stability to the crypto market and lead to higher prices.
As the crypto market grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology, which could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will grow. This could lead to more 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 increasing numbers of investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive 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 individual investors, are also starting to invest in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about it and comprehend it. As the awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services built upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning accepting crypto payments as 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
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more funds devote a percentage of their assets to digital currencies, it could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow, it will become easier for individuals to purchase and hold cryptocurrency, which can increase demand and price.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stock or real estate is a fast-growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could lead to increased demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses begin accepting cryptocurrency as a method of payment, this will make it easier for people to use and hold crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely 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 will be key.