It’s been a tough ride for the crypto market until 2022. By November the market was down by more than 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash turned them worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Every time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a lengthy bull run, which eventually overcomes the resistance set by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries taking to it, its usage and acceptance is increasing. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could lead to increasing participation in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale 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 can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases 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 increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
Due to the constant economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. As more and more everyday people learn about cryptocurrency and investing in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing increasing numbers of people are beginning to learn about and appreciate it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are now beginning to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the major benefits of cryptocurrency is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase it will be easier for people to buy and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, such as stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand and consequently higher costs for cryptocurrency.
More adoption by merchants
As more and more retailers begin accepting crypto as a means of payment, this makes it easier for people to utilize and store crypto, which could increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long-term Being patient and disciplined is essential.