It’s been a difficult ride for the crypto market in 2022. In November, the market had dipped by more than 70% from its previous peak on November 20, 2021. When things were going downhill and down, the FTX crash turned things even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. And every time, it has bounced back by a massive rally.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for over a year before reaching a bottom of $150. In 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown us that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries adopting it, its usage and acceptance is growing. From finance to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people being involved in the market which could increase the price.
A rise in the interest of institutions for cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. This increased interest from institutions could bring more stability to the market for crypto and could lead to greater prices.
As the market for crypto continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for crypto. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are beginning to look at ways they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, the potential of cryptocurrency assets will continue to expand. This could result in more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. As more and more everyday people learn about cryptocurrency and investing in it, this could lead to more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows increasing numbers of people are beginning to learn about and understand it. As awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
Financial decentralization (DeFi) is a rapidly growing area of the crypto market that enables finance services developed using blockchain technology. As DeFi expands and more projects and platforms are launched, it could lead to increased adoption and increased prices for crypto.
Developments in crypto payment methods
As the crypto market grows increasing numbers of companies are beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and higher prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are beginning to look at cryptocurrency as a possible asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and more expensive prices.
Use of crypto for cross-border payments
One of the major benefits of crypto is the ability to facilitate quick and inexpensive cross-border payments. As more individuals and businesses begin to use cryptocurrency for international transactions, it could result in increased demand and higher costs.
An increasing number of crypto ATM’s
With the amount of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, it could result in a rise in demand and higher prices for crypto.
A greater adoption rate by merchants
In the event that more merchants accept crypto as a form of payment, this makes it easier for consumers to utilize and store crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market could see a recovery in 2023. For those looking to invest for the long haul Being patient and disciplined is crucial.