It’s been a rough ride for the crypto market in 2022. In November the market had dropped by 70% from its previous peak on November 20, 2021. Just when the market was looking down after the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017 it broke that record and hit a record record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve witnessed another drop. But history shows 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 in the past, dips are usually followed by a long bull run that finally breaks through the resistance created by the market’s previous highest price. This pattern can be seen 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 the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. This growing demand could lead to increasing participation in the market which could boost prices.
The rise in interest of institutions in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
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 increase. This could lead to more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused by the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in crypto. Retail investors, or individual investors are also beginning to participate in the market for crypto. As more and more people are educated about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are starting to learn about and understand the concept. As the awareness and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed on top of blockchain technology. As DeFi continues to grow and more platforms and projects come online, this will lead to a rise in adoption and increased prices for crypto.
Advances in crypto-based payment methods
As the crypto market is growing, more and more companies are beginning using crypto to be a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are government-owned investment vehicles, are now beginning to look at crypto as an asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and higher prices.
Cryptocurrency is used for cross-border payments
One of the main advantages of cryptocurrency is its capability to perform swift and affordable cross-border transactions. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of ATMs for crypto continue to increase it will be easier for people to buy and hold crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that are used to represent ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher rates for the crypto.
A greater adoption rate by merchants
In the event that more retailers accept crypto as a means of payment, it will make it more convenient for consumers to hold and use crypto, which could drive up demand and prices.
So, will crypto increase in 2023? The only way to know is time. However, with these aspects in mind, it’s likely that the crypto market will have a rebound by 2023. And for those who are looking to invest for the long haul, being patient and disciplined is essential.