It’s been a rough ride for the crypto market in 2022. As of November the market had dropped by more than 70 percent from the previous high on November 20, 2021. Just when the market was going downhill after the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. And every time, it has bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips tend to be followed by a long bull run that finally breaks through the resistance created by the previous high price. This pattern can be seen in not just 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 myriad of ways. The growing popularity of crypto could result in increasing participation in the crypto market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are beginning to investigate the possibilities in crypto currencies. The increasing interest from institutions could provide more stability to the crypto market and result in higher prices.
Government regulations
As the crypto market continues to mature 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.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are beginning to look at ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could result in more use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. As more and more everyday people learn about crypto and the best ways to invest 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 continues to mature as more and more people are beginning to learn about and understand the concept. As understanding and acceptance of crypto grows, it will lead to more people buying as well as holding the crypto that can increase prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting to accept crypto as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are now beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could increase demand and higher prices.
Utilization of crypto to make international payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more and more people and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to grow it will be easier for people to buy and store crypto, which will increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership in an asset like stocks or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting cryptocurrency as a method of payment, it makes it easier for customers to use and hold crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market will see a recovery in 2023. If you’re committed to the long run patience and discipline is essential.