It’s been a rough ride for the crypto market until 2022. By November the market was down by 70 percent from the previous high at the end of November. And just when things were getting worse after the FTX crash turned things worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. And every time, it’s bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. But, in 2017, it broke the record, and hit a new high of $19,600. Then, in 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that eventually overcomes the resistance set by the previous market’s highest price. This is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and better companies and industries taking to the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in many ways. This growing demand could lead to more people getting involved in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From banks to hedge funds numerous large institutions are beginning to investigate the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrency, blockchain, offers a variety of applications that go beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is 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 greater adoption and higher prices.
Rising global economic uncertainty
Due to the constant economic uncertainty caused due to the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven assets like cryptocurrency and gold. Because the global economic climate is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the crypto market. As more and more everyday people become aware of crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to become aware about and understand the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
These funds are government-owned investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds devote a percentage of their portfolio to crypto, this could lead to increased demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase, it will become easier for individuals to purchase and store crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are created and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses begin accepting crypto as a form of payment, this will make it easier for consumers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.