It’s been a difficult journey for the cryptocurrency market through 2022. As of November, the market had dipped by more than 70% from its previous peak in November 2021. Just when the market was looking down and down, 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 had its fair share of dips in the past. And every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year, reaching a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through the resistance and hit a new highest of $68,000 in November 2021. Then, 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
As we’ve seen previously, dips are typically followed by a prolonged bull run that eventually surpasses the resistance created by the previous high price. This is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in the last few years. With more and more companies and industries embracing it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to more people getting involved in the crypto market which could increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are exploring ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas such as scalability and security, the potential of crypto assets will continue to grow. This could lead to more adoption 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 many investors are looking for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more people learn about crypto and the best ways to invest in it This could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows as more and more people are starting to learn about it and comprehend it. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows finance services created upon blockchain technology. As DeFi grows and more projects and platforms come online, this could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are starting to accept crypto as a method of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are now beginning to explore crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals 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.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like real estate or stock is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers accept crypto as a form of payment, it will make it more convenient for customers to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. With these things to consider, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. And for those who are in it for the long-term patience and discipline will be key.