It’s been a difficult ride for the crypto market through 2022. In November the market had dropped by 70 percent from the previous high on November 20, 2021. When things were looking down and down, 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 its fair share of drops in the past. Every time, it’s rebounded with a huge rally.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year before hitting a low of $150. 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 through that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had 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 previously, dips tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From finance to gaming, crypto is being used in many ways. And this growing use case could result in more people being involved in the market and, in turn, drive the prices up.
Increased institutional interest in crypto
In recent times we’ve noticed a growing interest from institutional investors in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and lead to higher prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can benefit from blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world remains uncertain, this could lead to an increase in demand for crypto and more expensive 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 participate in the crypto market. With increasing numbers of people become aware of crypto and how to invest in it this could result in increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market continues to mature increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows, it will lead to more people purchasing and holding crypto, which can drive up prices.
candlestick crypto charts
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more projects and platforms are launched, it will lead to a rise in adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are beginning accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are now beginning to explore cryptocurrency as a possible asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to grow, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, this could lead to increased demand and consequently higher costs for cryptocurrency.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, this will make it more convenient for customers to utilize and store crypto, which can drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. If you’re in it for the long-term Being patient and disciplined is essential.