It’s been a rough journey for the cryptocurrency market until 2022. As of November, the market had dipped by 70% from its previous peak in November 2021. When things were going downhill after the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips in the past. Each time, it’s bounced back with a big rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. However, in 2017 it broke that record, and hit a new highest of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a lengthy bull run, which eventually breaks through the resistance created by the market’s previous highest price. This is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress 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 variety of ways. The growing popularity of crypto can lead to more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad range of possible applications beyond just 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 crypto.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will continue to increase. This could lead to greater adoption and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain and uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing 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 become aware of crypto and how to invest in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows as more and more people are starting to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that can drive up prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed using blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are now beginning to explore crypto as a potential asset class. As more of these funds dedicate a part of their assets to digital currencies, this could result in a rise in demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more businesses and individuals are beginning to make use of cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and consequently higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. But with these factors to consider, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long-term, being patient and disciplined is essential.