It’s been a rough experience for the crypto market in 2022. In November the market had dropped by more than 70% from its previous peak on November 20, 2021. And just when things were getting worse after the FTX crash turned them more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of drops in the past. Each time, it’s bounced back by a massive rise.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for over a year before hitting a low of $150. In 2017, it broke the record, and hit a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In the year 2020 it struck through that resistance and hit a new highest of $68,000 in November 2021. Then, just like that we’ve had another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen in the past, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could lead to more people getting involved in the market, which in turn could drive the prices up.
Increased institutional interest in crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds and even large corporations are beginning to investigate the potential of crypto assets. The increasing interest from institutions could provide more stability to the market for crypto and lead to more expensive prices.
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 boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain offers a variety of applications that go that go beyond financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can make use of blockchain technology. This could increase investment and enthusiasm in crypto.
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like security and scalability, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Rising global economic uncertainty
With the ongoing economic uncertainty caused due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven investments like bitcoin and even gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the crypto market. In the future, as more everyday people are educated about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market is maturing as more and more people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to more people purchasing as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables finance services built on top of blockchain technology. As DeFi grows and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market grows as more and more businesses are starting accepting crypto payments as a means of payment. This could result in increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are owned by the state as investment vehicles, are beginning to show interest in crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and more expensive prices.
Utilization of crypto to make cross-border payments
One of the major benefits of cryptocurrency is its ability to facilitate quick and inexpensive cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of ATMs that accept crypto continue to increase, it will become easier for individuals to purchase and hold crypto, which could boost demand and increase prices.
Security tokens are developed for development
Security tokens, also known as digital assets that are used to represent ownership in an asset like stock or real estate are rapidly expanding sector of the crypto market. As more security tokens are created and traded, this could lead to increased demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting cryptocurrency as a method of payment, this makes it easier for people to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects being considered, it’s likely that the crypto market will see a recovery in 2023. If you’re in it for the long-term patience and discipline is crucial.