It’s been a rough ride for the crypto market in 2022. By November the market was down by more than 70 percent from the previous high on November 20, 2021. And just when things were getting worse, the FTX crash turned them worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced many drops in the past. Every time, it has bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017 it broke that record and hit a record highest of $19,600. In 2018, it was trading at $3,100. And in the year 2020 it struck that resistance and reached a new peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that at the end of every dip the bull runs.
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 breaks through the resistance created by the market’s previous 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 embracing it, its usage and acceptance is rising. From finance to gaming, crypto is being used in a variety of ways. And this growing use case could result in increasing participation in the crypto market, which in turn could boost prices.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are now exploring the potential for crypto-based assets. The increasing interest from institutions can bring stability to the market for crypto and lead to more expensive prices.
Regulations from the Government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of possible applications beyond the realm of financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to more adoption and higher prices.
Rising global economic uncertainty
In the current instability in the economy caused due to the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. As more and more people learn about cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market, which allows the provision of financial services created on top of blockchain technology. As DeFi expands and more projects and platforms come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows, more and more companies are beginning accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in regular transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as government-owned investments, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, it could result in a rise in demand and more expensive prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s increase, it will become easier for consumers to purchase and keep crypto, which could increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stock or real estate are rapidly expanding segment of the cryptocurrency market. As more security tokens are issued and traded, this could result in a rise in demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
With the increasing number of businesses start accepting cryptocurrency as a method of payment, this makes it easier for customers to utilize and store cryptocurrency, which will boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. And for those who are in it for the long haul Being patient and disciplined is crucial.