It’s been a rough experience for the crypto market in 2022. By November, the market had dipped by more than 70% from its previous peak in November 2021. And just when things were going downhill and down, the FTX crash turned them even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of drops in the past. Every time, it’s bounced back with a big increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. In 2017, it broke that record and hit a record highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that after each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen previously, dips tend to be followed by a long bull run that eventually surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in the last few years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From banking to gaming, crypto is being used in many ways. This growing demand can lead to more people getting involved in the market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent times we’ve witnessed a rising interest from institutional investors in crypto. From hedge funds to banks and even large corporations are beginning to investigate the possibilities for crypto-based assets. The increased interest of institutions could provide more stability to the market for crypto and could lead to greater prices.
Government regulations
As the crypto market grows, governments around the world are starting to create more favorable regulations for cryptocurrency. This could help attract more investors and increase the adoption rate of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrencies, blockchain, is a broad range of possible applications beyond just financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in crypto.
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, the potential of cryptocurrency assets will continue to increase. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused through the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world is uncertain, this could lead to increased demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the crypto market. As more and more people are educated about crypto and the best ways 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 continues to mature increasing numbers of people are beginning to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, it will lead to more people buying or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services developed upon blockchain technology. As DeFi grows and more platforms and projects come online, this could result in increased use and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more businesses and individuals begin to use crypto 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.
As the number of ATMs for crypto continue to grow it will be easier for individuals to purchase and keep crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that are used to represent ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
With the increasing number of retailers begin accepting cryptocurrency as a method of payment, it will make it easier for people to hold and use cryptocurrency, which will boost demand and increase prices.
So, will crypto grow in 2023? It’s only time to find out. With these things in mind, it’s likely that the crypto market will be able to see a rebound in 2023. And for those who are looking to invest for the long run patience and discipline is crucial.