It’s been a difficult ride for the crypto market in 2022. In November the market was down by more than 70% from its previous peak at the end of November. When things were getting worse after the FTX crash turned things even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had many dips in the past. And every time, it’s bounced back with a big 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. But, in 2017, it broke the record, and hit a new highest of $19,600. Fast forward to 2018, the price was at $3,100. And in the year 2020 it struck through the resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that after 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 long bull run that eventually surpasses the resistance created by the previous market’s highest price. This is evident not only in 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 taking to it, its usage and acceptance is growing. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand can lead to more people being involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve noticed a growing curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions can bring stability to the crypto market and lead to greater prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, has a wide range of possible applications beyond just financial transactions. From supply chain management to voting systems, more industries are exploring ways they can make use of blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to expand. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic and 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 higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors are also beginning to participate in the crypto market. In the future, as more everyday people are educated about cryptocurrency and investing in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing or holding cryptocurrency, and this can drive up prices.
crypto and inflation relationship
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows financial services to be developed on top of blockchain technology. As DeFi expands 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 grows increasing numbers of companies are starting accepting crypto payments as a means of payment. This could lead to an increase in the usage of crypto in daily transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investment vehicles, are starting to show interest in crypto as an asset class. As more funds allocate a portion of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
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, it could result in increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto increase it will be easier for consumers to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, such as stock or real estate are rapidly expanding sector of the crypto market. With the increasing number of security tokens being created and traded, it could lead to increased demand, and thus higher prices for crypto.
More adoption by merchants
As more and more businesses accept crypto as a means of payment, it will make it easier for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. With these things to consider, it’s likely that the cryptocurrency market will have a rebound by 2023. And for those who are committed to the long haul patience and discipline is crucial.