It’s been a tough experience for the crypto market in 2022. As of November the market was down by more than 70% from its previous peak 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 cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Every time, it’s rebounded by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke that record, and hit a new record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of 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
Just like we’ve seen in the past, dips are typically followed by a long bull run that finally overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in increasing participation in the market, which in turn could boost prices.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities of crypto assets. This increased interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations from the Government
As the crypto market is maturing and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This could help attract more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrency, blockchain, is a broad 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 benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors are also beginning to participate in the crypto market. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about and appreciate it. As understanding and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which could raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market that allows the provision of financial services created using blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investments, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of crypto is its ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s increase, it will become easier for individuals to purchase and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this could lead to increased demand, and thus higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a form of payment, it will make it easier for consumers to use and hold crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. For those in it for the long-term Being patient and disciplined will be key.