It’s been a difficult journey for the cryptocurrency market in 2022. In November the market was down by more than 70% from its previous peak in November 2021. Just when the market was getting worse and down, the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen its fair share of dips over the years. Every time, it has bounced back by a massive increase.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. In 2017 it broke that record and hit a record record high of $19,600. In 2018, and it was trading at $3,100. In 2020, it broke through the resistance and hit a new high of $68,000 in November 2021. And 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
Just like we’ve seen previously, dips are typically followed by a lengthy bull run, which eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could result in increasing participation in the crypto market and, in turn, increase the price.
Increased institutional interest in crypto
In recent times we’ve noticed a growing demand from investors of institutional scale in cryptocurrency. From hedge funds to banks numerous large institutions are now exploring the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the crypto market and result in greater prices.
Government regulations
As the market for crypto is maturing and mature, governments across the globe are starting to create more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can utilize blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technologies are constantly evolving.
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could lead to greater adoption and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in crypto. Retail investors, or even individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of people become aware of cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing 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, which allows finance services created using blockchain technology. As DeFi expands and more platforms and projects are launched, it could result in increased use and increased prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow as more and more businesses are beginning 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
The sovereign wealth fund, also known as state-owned investments, are beginning to show interest in crypto as an asset class. As more of these funds allocate a portion of their portfolio to crypto, this could lead to increased demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is its ability to make fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for people to buy and hold crypto, which could increase demand and price.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, like stocks or real estate are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, it can lead to a higher demand and higher prices for crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a means of payment, it makes it easier for consumers to use and hold crypto, which can boost demand and increase prices.
Will crypto be on the grow in 2023? The only way to know is time. But with these factors being considered, it’s likely that the crypto market will have a rebound by 2023. For those committed to the long run patience and discipline is crucial.