It’s been a difficult ride for the crypto market until 2022. In November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips over the years. Every time, it’s rebounded with a huge increase.
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 highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that at the end of every dip the bull runs.
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 that eventually overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
Regulations from the Government
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable regulations for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrency, blockchain, has a wide range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will expand. This could result in more acceptance and higher 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 beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market is maturing increasing numbers of people are beginning to become aware about it and comprehend the concept. As understanding and acceptance of crypto grows it could result in more people purchasing and holding crypto, which could raise prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services created upon blockchain technology. As DeFi expands and more projects and platforms become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market continues to grow as more and more businesses are starting to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned instruments for investing, are beginning to look at crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs that accept crypto increase it will be more convenient for people to buy and store crypto, which will increase demand and price.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this could result in a rise in demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more businesses begin accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are committed to the long-term patience and discipline is essential.