It’s been a tough journey for the cryptocurrency market through 2022. In November, the market had dipped by more than 70% from its previous peak at the end of November. When things were getting worse and down, the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. And every time, it’s rebounded with a huge increase.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke that record and reached a new record high of $19,600. Fast forward to 2018, the price was at $3,100. In 2020, it broke through that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs tend to be followed by a prolonged bull run, which eventually surpasses the resistance created by the market’s previous highest price. This pattern is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. This growing demand could result in increasing participation in the market which could boost prices.
Increased institutional interest in crypto
In the last few years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks numerous large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Government regulations
As the market for crypto grows, governments around the world are beginning to develop more favorable rules for crypto. This could help attract more investors and increase the acceptance of crypto in general.
A broader range of blockchain applications
The underlying technology behind many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems and more industries are beginning to look at ways they can benefit from blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are starting to look for safe haven assets such as gold and crypto. As the global economic situation is uncertain it could result in increased demand for crypto and more expensive prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people learn about cryptocurrency and investing in it This could result in an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market grows as more and more people are beginning to become aware about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows it could result in increasing numbers of people purchasing and holding crypto, which could drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables the provision of financial 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 higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows as more and more businesses are beginning 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
These funds are government-owned investment vehicles, are beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the capability to perform swift and affordable cross-border transactions. As more businesses and individuals start to utilize crypto for international transactions, this could lead to increased demand and higher prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow it will be more convenient for individuals to purchase and hold crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that represent ownership in an asset such as stocks or real estate, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
In the event that more businesses begin accepting crypto as a form of payment, this makes it easier for consumers to utilize and store crypto, which can drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. But with these factors in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.