It’s been a tough experience for the crypto market in 2022. In November the market was down by 70 percent from its previous high in November 2021. Just when the market was looking down after the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips over the years. Every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. And in 2020, the price broke through that resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that following each 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 lengthy bull run that finally overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries taking to the technology, its use and acceptance is rising. From banking to gaming, crypto is being used in many ways. And this growing use case could lead to increasing participation in the crypto market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are beginning to investigate the potential in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and could lead to greater prices.
Regulations from the Government
As the market for crypto grows, governments around the world are starting to create more favorable rules for cryptocurrency. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Uncertainty in the global economy
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and higher prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about it and comprehend the concept. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could raise prices.
3rd generation crypto
Decentralized finance (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
Development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of merchants begin accepting cryptocurrency as a method of payment, this will make it more convenient for customers to use and hold crypto, which could boost demand and increase prices.
Will crypto be on the increase in 2023? The only way to know is time. With these things being considered, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are committed to the long-term, being patient and disciplined is crucial.