It’s been a rough experience for the crypto market through 2022. By November the market had dropped by 70 percent from the previous high on November 20, 2021. Just when the market was getting worse and down, the FTX crash turned things even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many drops in the past. Every time, it’s rebounded with a big rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before hitting a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Then, in 2018, and it was trading at $3,100. And in 2020, it broke that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had another dip. But history shows us that at the end of every dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a long bull run, which eventually overcomes the resistance set by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and better companies and industries adopting the technology, its use and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. This growing demand can lead to more people being involved in the market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In the last few years we’ve witnessed a rising interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the possibilities of crypto assets. The increased interest of institutions could provide more stability to the crypto market and could lead to higher prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the mainstream adoption of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, has a wide range of potential use cases beyond the realm of financial transactions. From supply chain management to voting systems, more companies are exploring ways they can make use of blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the early stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to increase. This could result in more adoption and higher prices.
Rising global economic uncertainty
With the ongoing economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are starting to look for safe haven assets such as cryptocurrency and gold. As the global economic situation remains uncertain it could result in an increase in demand for crypto and increased prices.
Interest from retail investors
The institutional investors aren’t alone in people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. In the future, as more everyday people are educated about 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, more and more people are beginning to learn about and understand it. As understanding and acceptance of cryptocurrency grows, it will lead to increasing numbers of people purchasing or holding cryptocurrency, and this could raise 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 grows and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are starting to look at cryptocurrency as a possible asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, it could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the major benefits of crypto is its ability to make swift and affordable cross-border transactions. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of ATMs that accept crypto continue to increase it will be easier for individuals to purchase and keep crypto, which will drive up demand and prices.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock, are a rapidly growing sector of the crypto market. With the increasing number of security tokens being issued and traded, it can lead to a higher demand and consequently higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more retailers begin accepting crypto as a means of payment, this will make it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. However, with these aspects in mind, it’s likely that the cryptocurrency market will be able to see a rebound in 2023. If you’re committed to the long haul patience and discipline will be key.