It’s been a tough journey for the cryptocurrency market in 2022. In November the market was down by more than 70% from its previous peak on November 20, 2021. When things were getting worse and down, the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. And every time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. However, in 2017 it broke that record and reached a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that following each 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 lengthy bull run that eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more businesses and industries embracing the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in many ways. And this growing use case could result in more people being involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto is maturing and mature, governments across the globe are beginning to develop more favorable regulations 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 many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can utilize blockchain technology. This will stimulate more investment and excitement in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy 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 bitcoin and even gold. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. In the future, as more people become aware of crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are starting to learn about and understand it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow, more and more companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are beginning to explore crypto as an asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more and more people and businesses start to utilize crypto for international transactions, this can lead to a rise in demand and higher prices.
An increasing number of crypto ATM’s
The number of crypto ATM’s continue to grow, it will become easier for individuals to purchase and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that represent ownership of an asset, such as stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher prices for crypto.
More adoption by merchants
As more and more retailers accept crypto as a means of payment, it will make it easier for consumers to hold and use crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. But with these factors to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. For those looking to invest for the long-term, being patient and disciplined is crucial.