It’s been a difficult 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 them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips in the past. Each time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke that record and reached a new high of $19,600. Then, in 2018, it was trading at $3,100. And in the year 2020 it struck through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve seen another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and better companies and industries embracing it, its usage and acceptance is increasing. From banking to gaming, crypto is being used in a myriad of ways. And this growing use case could lead to more people getting involved in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are beginning to investigate the potential of crypto assets. The increasing interest from institutions could bring more stability to the crypto market and result in greater prices.
Regulations of the government
As the market for crypto is maturing as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and boost the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can make use of blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, the potential of cryptocurrency assets will continue to grow. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are looking for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or individual investors, are also starting to invest in the market for crypto. In the future, as more people become aware of cryptocurrency and investing in it this could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are beginning to become aware about it and comprehend it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can raise prices.
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The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows the provision of financial services built upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions, this can lead to a rise in demand and higher prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for people to buy and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stock or real estate, are a rapidly growing sector of the crypto market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses start accepting crypto as a form of payment, it will make it easier for people to hold and use crypto, which can drive up demand and prices.
Will crypto be on the grow in 2023? It’s only time to find out. However, with these aspects being considered, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long run, being patient and disciplined is essential.