It’s been a difficult journey for the cryptocurrency market through 2022. By November, the market had dipped by 70 percent from the previous high on November 20, 2021. And just when things were getting worse and down, the FTX crash turned things more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many drops in the past. And every time, it’s rebounded with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. But, in 2017 it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke that resistance and reached a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. However, the past has proven that following each dip the bull runs.
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 surpasses the resistance created by the previous high price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and better companies and industries embracing the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. The growing popularity of crypto can lead to more people being involved in the market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could provide more stability to the crypto market and result in higher prices.
Regulations from the Government
As the crypto market continues to mature, 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 adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, offers a variety of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through 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 is uncertain, this could lead to more demand for crypto as well as 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 starting to get involved in the crypto market. As more and more everyday people become aware of cryptocurrency and investing in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows as more and more people are beginning to become aware about and understand it. As the awareness and acceptance grows of crypto, this could lead to more people purchasing and holding crypto, which could raise prices.
pound coin crypto
Decentralized finance (DeFi) is an emerging area of the crypto market that allows the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to explore crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its ability to make swift and affordable cross-border transactions. As more individuals and businesses 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.
As the number of ATMs for crypto continue to grow, it will become easier for individuals to purchase and store crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing area of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
As more and more retailers accept crypto as a form of payment, it makes it easier for people to utilize and store crypto, which could drive up demand and prices.
Will crypto be on the rise in 2023? The only way to know is time. With these things to consider, it’s likely that the crypto market could have a rebound by 2023. If you’re looking to invest for the long-term patience and discipline will be key.