It’s been a rough journey for the cryptocurrency market through 2022. By November the market had dropped by 70% from its previous peak on November 20, 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 cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. And every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then 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. In 2018, the price was at $3,100. In the year 2020 it struck through that resistance and reached a new peak of $68,000 in the month of November 2021. Then, just like that we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a long bull run that eventually overcomes the resistance set by the previous high 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 progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. The growing popularity of crypto can lead to more people being involved in the crypto market and, in turn, increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the potential for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in higher prices.
Regulations of the government
As the market for crypto is maturing, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and boost the mainstream adoption of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, 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 utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more use and increase in prices.
Uncertainty in the global economy
Due to the constant economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. 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 ones showing interest in cryptocurrency. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people become aware of crypto and how to invest in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market is maturing, more and more people are beginning to learn about and appreciate it. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
twap crypto
Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows finance services developed upon blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto is growing, more and more companies are beginning accepting crypto payments as a means 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 look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their assets to digital currencies, it could lead to increased demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the major benefits of crypto is its capability to perform swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this could lead to increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase it will be easier for consumers to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership in an asset like real estate or stock are rapidly expanding area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher prices for crypto.
A greater adoption rate by merchants
As more and more merchants begin accepting crypto as a means of payment, this will make it more convenient for people to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.