It’s been a tough experience for the crypto market through 2022. As of November the market was down by more than 70 percent from the previous high in November 2021. Just when the market was looking down, the FTX crash turned things even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many drops in the past. And every time, it has bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017 it broke that record and reached a new highest of $19,600. Fast forward to 2018, and it was trading at $3,100. In 2020, the price broke that resistance, and reached a record peak of $68,000 in the month of November 2021. Then, just like that we’ve seen another dip. However, history has shown us that following each dip, there’s a bull run.
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 breaks through the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in recent years. With more and more companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a myriad of ways. And this growing use case could result in more people being involved in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in more expensive prices.
Regulations from the Government
As the crypto market continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This is likely to attract more investors and boost the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond the realm of financial transactions. From supply chain management to voting systems, more industries are exploring ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Advancements in technology
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors increasing numbers of investors are beginning to look for safe haven assets such as cryptocurrency and gold. Because the global economic climate remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to participate in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it This could result in more demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to become aware about and understand it. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can raise prices.
Decentralized finance (DeFi) is an emerging area of the crypto market that allows finance services built upon 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 is growing, more and more companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to explore crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the major benefits of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of crypto ATM’s increase it will be easier for consumers to purchase and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, such as real estate or stock are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and higher costs for cryptocurrency.
More adoption by merchants
With the increasing number of retailers accept cryptocurrency as a method of payment, this makes it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could see a recovery in 2023. If you’re in it for the long haul, being patient and disciplined will be key.