It’s been a difficult experience for the crypto market in 2022. In November the market was down by more than 70 percent from its previous high in November 2021. And just when things were looking down and down, the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many dips over the years. Every time, it’s bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year, reaching a low of $150. However, in 2017, it broke that record and reached a new record high of $19,600. Then, in 2018, the price was at $3,100. In the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. Just like that, we’ve seen another dip. However, history has shown us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen in the past, dips tend to be followed by a long bull run that finally overcomes the resistance set by the previous market’s highest price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in the last few years. With more and more businesses and industries adopting the technology, its use and acceptance is rising. From gaming to finance the use of crypto is increasing in a myriad of ways. This growing demand could lead to increasing participation in the market which could drive the prices up.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto is maturing, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors and boost the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are exploring ways they can utilize blockchain technology. This could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas such as security and scalability, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like gold and crypto. As the global economic situation remains uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. With increasing numbers of everyday people learn about crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend the concept. As the awareness and acceptance grows of crypto, it will lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
crypto exchange development cost
The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services built upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are beginning accepting crypto payments as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investments, are starting to show interest in crypto as an asset class. As more funds dedicate a part of their portfolio to crypto, this could lead to increased demand and increased prices.
Cryptocurrency is used for cross-border payments
One of the biggest benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals 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
The number of crypto ATM’s continue to grow, it will become easier for consumers to purchase and store crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
As more and more merchants accept crypto as a means of payment, this makes it easier for customers to hold and use cryptocurrency, which will boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. With these things being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are looking to invest for the long-term, being patient and disciplined will be key.