It’s been a rough journey for the cryptocurrency market in 2022. In November the market had dropped by 70% from its previous peak in November 2021. When things were looking down after the FTX crash made them look even more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Every time, it’s bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom of $150. But, in 2017, it broke that record and reached a new record high of $19,600. In 2018, and it was trading at $3,100. And in the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. However, the past has proven that following each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that eventually overcomes the resistance set by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to more people getting involved in the crypto market and, in turn, drive the prices up.
The rise in interest of institutions in cryptocurrency
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks numerous large institutions are starting to explore the possibilities of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, is a broad range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are at the very beginning of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty brought on through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate 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 cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the crypto market. With increasing numbers of people learn about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto grows, more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, this could lead to more people buying as well as holding the crypto that could increase prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that enables financial services to be built upon blockchain technology. As DeFi continues to grow and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
The development of crypto payment methods
As the market for crypto continues to grow as more and more businesses are starting using crypto to be a form of payment. This could lead to an increase in the use of crypto in regular transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the major benefits of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals start to utilize 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
As the number of ATMs that accept crypto increase it will be easier for people to buy and store crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset like real estate or stock is a fast-growing sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher prices for crypto.
A greater adoption rate by merchants
With the increasing number of merchants start accepting crypto as a form of payment, it will make it more convenient for customers to hold and use crypto, which can boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re committed to the long run, being patient and disciplined is crucial.