It’s been a rough ride for the crypto market through 2022. In November the market was down by 70% from its previous peak in November 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 crypto market, especially Bitcoin has had many drops in the past. Each time, it’s rebounded with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve seen another dip. But history shows us that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are usually followed by a prolonged bull run, which 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 technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is increasing. From banking to gaming the use of crypto is increasing in a myriad of ways. This growing demand could lead to more people being involved in the crypto market which could drive the prices up.
Increased institutional interest in cryptocurrency
In the last few years, we’ve seen a growing interest from institutional investors in cryptocurrency. From banks to hedge funds and even large corporations are beginning to investigate the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and could lead to greater prices.
Regulations of the government
As the crypto market continues to mature, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, is a broad range of applications that go beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can benefit from blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas like security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic and other factors many investors are starting to look for safe haven investments like gold and crypto. As the global economic situation remains uncertain it could result in more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. With increasing numbers of everyday people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are beginning to become aware about and understand the concept. As understanding and acceptance of crypto grows it could result in more people purchasing as well as holding the crypto that can raise prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables financial services to be developed upon blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market continues to grow, more and more companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and an increase in the cost of transactions.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are beginning to look at crypto as an asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of cryptocurrency is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs for crypto continue to grow it will be easier for consumers to purchase and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like stocks or real estate is a fast-growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could lead to increased demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more retailers start accepting cryptocurrency as a method of payment, it will make it easier for people to use and hold cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects 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 run, being patient and disciplined will be key.