It’s been a difficult journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70 percent from its previous high in November 2021. And just when things were getting worse after the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen its fair share of dips over the years. And every time, it’s rebounded with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before reaching a bottom of $150. In 2017 it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and more companies and industries taking to it, its usage and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. And this growing use case could result in more people getting involved in the crypto market, which in turn could increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the market for crypto and result in more expensive prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are starting to create more favorable regulations for cryptocurrency. This is likely to attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more and more industries are beginning to look at ways they can make use of blockchain technology. This will drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty brought on through the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more everyday people are educated about crypto and how to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows, more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that allows finance services developed upon blockchain technology. As DeFi expands and more projects and platforms become available, this will lead to a rise in adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting to accept crypto as a method of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to look at crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is the capability to perform swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and store crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, or digital assets that are used to represent ownership in an asset like stock or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more retailers accept crypto as a means of payment, it makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? It’s only time to find out. With these things in mind, it’s possible that the cryptocurrency market will have a rebound by 2023. For those committed to the long run, being patient and disciplined is crucial.