It’s been a tough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70 percent from its previous high at the end of November. When things were getting worse, the FTX crash made them look even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Every time, it’s bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. But, in 2017, it broke that record, and hit a new high of $19,600. In 2018, the price was at $3,100. And in the year 2020 it struck through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
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 eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries adopting it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could result in more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are beginning to investigate the potential in crypto currencies. This increased interest from institutions can bring stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the acceptance of crypto in general.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, offers a variety of applications that go that go beyond financial transactions. In addition to supply chain management, voting and other systems and more industries are exploring ways they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, potential of crypto 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 factors increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world remains 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 one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. In the future, as more people learn about crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about and understand it. As the awareness and acceptance grows of crypto, it will lead to more people purchasing as well as holding the crypto that can drive up prices.
stock market crypto correlation
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed on top of blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are starting using crypto to be a means of payment. This could lead to increased use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are state-owned investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and higher prices.
Use of crypto for international payments
One of the major benefits of crypto is its ability to facilitate swift and affordable cross-border transactions. 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.
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, this could result in a rise in demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants accept crypto as a means of payment, it makes it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. If you’re in it for the long haul patience and discipline will be key.