It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by 70 percent from the previous high in November 2021. And just when things were going downhill after the FTX crash made them look even worse. The question is, can 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’s bounced back with a big increase.
In 2013, for instance, 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 that record, and hit a new highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us 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, which eventually breaks through the resistance created by the previous market’s highest price. This is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more companies and industries embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand can lead to more people getting involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks and even large corporations are now exploring the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of possible applications that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
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 expand. This could result in more adoption and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic and other factors, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people are educated about crypto and how to invest in it this could result in increased demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows it could result in more people purchasing and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services developed using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are starting to accept crypto as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are owned by the state as investments, are beginning to explore crypto as a potential asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase it will be easier for consumers to purchase and store crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership of an asset, such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and higher prices for crypto.
More adoption by merchants
As more and more retailers begin accepting cryptocurrency as a method of payment, this will make it easier for people to hold and use cryptocurrency, which will drive up demand and prices.
So, is crypto likely to rise in 2023? The only way to know is time. But with these factors in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long run patience and discipline is crucial.