It’s been a difficult ride for the crypto market through 2022. As of November the market was down by more than 70 percent from its previous high in November 2021. Just when the market was looking down and down, the FTX crash made them look worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Every time, it has bounced back by a massive rise.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year, reaching a low of $150. However, in 2017 it broke that record, and hit a new high of $19,600. In 2018, and it was trading at $3,100. And in 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve witnessed another drop. 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
Just like we’ve seen in the past, dips tend to be followed by a long bull run, which eventually breaks through the resistance created by the market’s previous highest price. This pattern can be seen not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in a variety of ways. And this growing use case can lead to increasing participation in the market which could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the crypto market is maturing, governments around the world are starting to create more favorable rules for crypto. This is likely to attract more investors and boost 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 possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can utilize blockchain technology. This will drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is still in the beginning stages of development. As progress is made in areas such as scalability and security, the potential of crypto assets will grow. This could result in more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused by the COVID-19 pandemic as well as other factors many investors are looking for safe haven investments like cryptocurrency and gold. As the global economic situation is uncertain it could result in increased demand for crypto and higher prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more everyday people become aware of cryptocurrency and investing in it This could result in more demand and higher prices.
A growing number of people are becoming aware of and accepting cryptocurrency
As the market for crypto is maturing as more and more people are starting to learn about it and comprehend the concept. As awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that can increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built 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 more expensive prices for crypto.
Developments in crypto payment methods
As the crypto market is growing as more and more businesses are starting accepting crypto payments as a method of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are starting to look at crypto as a potential asset class. As more funds devote a percentage of their assets to digital currencies, this could result in a rise in demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the main advantages of crypto is its capability to perform quick and inexpensive cross-border payments. As more and more people and businesses begin to use crypto for international transactions, it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s increase it will be easier for people to buy and store cryptocurrency, which can drive up demand and prices.
Security tokens are developed for development
Security tokens, which are digital assets that signify ownership of an asset, like stock or real estate, are a rapidly growing area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
With the increasing number of retailers accept crypto as a means of payment, it will make it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects to consider, it’s possible that the crypto market could have a rebound by 2023. For those committed to the long-term patience and discipline is essential.