It’s been a difficult ride for the crypto market until 2022. In November, the market had dipped by 70% from its previous peak in November 2021. When things were going downhill and down, the FTX crash made them look even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of drops in the past. Each time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke that resistance and hit a new high of $68,000 in November 2021. Then, just like that we’ve had another dip. 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 lengthy bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more businesses and industries adopting it, its usage and acceptance is increasing. From finance to gaming, crypto is being used in many ways. This growing demand could result in more people getting involved in the crypto market and, in turn, boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in more expensive prices.
Regulations of the government
As the market for crypto grows, governments around the world are starting to create more favorable regulations for crypto. This will help draw more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets like gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to get involved in the market for crypto. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this can increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows finance services built upon blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow increasing numbers of companies are beginning using crypto to be a method of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investment vehicles, are starting to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion of their portfolio to crypto, this could result in a rise in demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are created and traded, it could lead to increased demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses begin accepting cryptocurrency as a method of payment, it will make it more convenient for people to utilize and store crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market will have a rebound by 2023. For those looking to invest for the long haul, being patient and disciplined is essential.