It’s been a rough journey for the cryptocurrency market in 2022. In November, the market had dipped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse, the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. And every time, it’s rebounded with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. However, in 2017 it broke that record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had 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
As we’ve seen in the past, dips tend to be followed by a long bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has 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 finance to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and could lead to more expensive prices.
Regulations from the Government
As the market for crypto grows, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the beginning stages of development. As advances continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven investments like gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people learn about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can drive up prices.
transfer crypto from revolut
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables the provision of financial services developed upon 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.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in regular transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate is a fast-growing area of the crypto market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a means of payment, this will make it more convenient for customers to hold and use crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could be able to see a rebound in 2023. For those committed to the long-term, being patient and disciplined will be key.