It’s been a rough experience for the crypto market through 2022. In November the market had dropped by more than 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash made them look worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many dips in the past. And every time, it’s rebounded by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. In 2017 it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. In the year 2020 it struck through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, history has shown us that at the end of every 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 prolonged bull run, which eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
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 the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto can lead to more people getting involved in the crypto market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent years we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are beginning to investigate the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the market for crypto and result in higher prices.
Regulations of the government
As the crypto market is maturing as it matures, governments all over the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that is the basis of the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. From supply chain management to voting systems, more companies are exploring ways they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will continue to expand. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on by the COVID-19 pandemic and other factors many investors are beginning to look for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in crypto. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of people are educated about crypto and the best ways to invest in it this could result in increased demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are beginning to become aware about it and comprehend it. As awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing as well as holding the crypto that could drive up prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created upon blockchain technology. As DeFi expands and more platforms and projects are launched, it could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow, more and more companies are beginning to accept crypto as a form of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are state-owned investments, are now beginning to look at cryptocurrency as a possible asset class. As more funds dedicate a part or their entire portfolios to cryptocurrency, it could lead to increased demand and higher prices.
Cryptocurrency is used for international payments
One of the main advantages of cryptocurrency is its capability to perform quick and inexpensive cross-border payments. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto increase, it will become easier for consumers to purchase and hold cryptocurrency, which can boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that signify ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. As more security tokens are created and traded, it can lead to a higher demand and higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses begin accepting crypto as a form of payment, this will make it easier for people to hold and use crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things being considered, it’s likely that the crypto market could have a rebound by 2023. And for those who are in it for the long haul patience and discipline is essential.