It’s been a difficult ride for the crypto market through 2022. In November the market had dropped by more than 70% from its previous peak in November 2021. And just when things were going downhill after the FTX crash made them look even worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had its fair share of dips over the years. Every time, it’s bounced back with a huge rise.
For example, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. In 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through the resistance, and reached a record high of $68,000 in November 2021. Then, just like that we’ve seen another dip. However, the past has proven 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 usually followed by a prolonged bull run that finally surpasses the resistance created by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and more companies and industries embracing the technology, its use and acceptance is increasing. From gaming to finance, crypto is being used in a myriad of ways. And this growing use case could result in more people getting involved in the market and, in turn, drive the prices up.
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 starting to explore the possibilities for crypto-based assets. The increased interest of institutions can bring stability to the crypto market and could lead to greater prices.
Government regulations
As the crypto market continues to mature and mature, governments across the globe are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that underlies the majority of cryptocurrencies, blockchain offers a variety of applications that go beyond just financial transactions. For example, from supply chain management and voting, many companies are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are still in the beginning stages of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will expand. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
Due to the constant instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, also known as individual investors, are also starting to get involved in the cryptocurrency market. As more and more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature as more and more people are starting to learn about it and comprehend the concept. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which could raise prices.
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Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market that enables finance services created upon blockchain technology. As DeFi grows and more platforms and projects come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto 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 usage of crypto in daily transactions, and a rise in prices.
More investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned instruments for investing, are now beginning to show interest in crypto as an asset class. As more of these funds devote a percentage or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is its ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
As the number of ATMs that accept crypto increase, it will become easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership of an asset, such as real estate or stock are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could lead to increased demand and consequently higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses start accepting crypto as a form of payment, it makes it easier for customers to use and hold crypto, which could increase demand and price.
Will crypto be on the grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term Being patient and disciplined will be key.