It’s been a difficult journey for the cryptocurrency market until 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were getting worse and down, the FTX crash turned things even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of dips over the years. And every time, it’s rebounded by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, the past has proven 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 are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more businesses and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could result in more people being involved in the crypto market, which in turn could drive the prices up.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. The increased interest of institutions could bring more stability to the market for crypto and lead to greater prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are at the very beginning of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
Due to the constant instability in the economy caused by the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets like cryptocurrency and gold. Since the economic outlook for the world remains uncertain, this could lead to increased demand for crypto and increased prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the crypto market. With increasing numbers of everyday people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows increasing numbers of people are beginning to become aware about and understand it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be built using blockchain technology. As DeFi expands 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 crypto market is growing, more and more companies are beginning to accept crypto as a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Use of crypto for payment across borders
One of the major benefits of crypto is its ability to facilitate quick and inexpensive 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.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s continue to increase, it will become easier for people to buy and hold 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 real estate or stock are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it easier for people to use and hold crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market will see a recovery in 2023. If you’re committed to the long haul Being patient and disciplined is crucial.