It’s been a rough journey for the cryptocurrency market in 2022. As of November the market had dropped by 70 percent from its previous high on November 20, 2021. When things were getting worse and down, the FTX crash made them look more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen its fair share of dips in the past. Every time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. But, in 2017, it broke that record and reached a new high of $19,600. In 2018, the price was at $3,100. In 2020, the price broke that resistance and reached a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us that at the end of every dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in the last few years. With more and more businesses and industries embracing it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a myriad of ways. This growing demand could lead to more people getting involved in the market which could drive the prices up.
Increased institutional interest in cryptocurrency
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are now exploring the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and could lead to greater prices.
Regulations from the Government
As the market for crypto continues to mature, governments around the world are starting to create more favorable rules for crypto. This could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can benefit from blockchain technology, which could stimulate more investment and excitement in crypto.
Technology advancements
Blockchain technology and cryptography are at the very beginning 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 lead to more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused by the COVID-19 pandemic and other factors many investors are starting to look for safe haven assets like bitcoin and even gold. As the global economic situation remains uncertain and uncertain, this could lead to 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 crypto. Retail investors, or even individual investors, are also starting to participate in the market for crypto. In the future, as more everyday people become aware of crypto and how to invest in it, this could lead to increased demand and higher prices.
The growing awareness and acceptance of crypto
As the market for crypto is maturing increasing numbers of people are starting to learn about and understand the concept. As understanding and acceptance grows of crypto it could result in more people buying and holding crypto, which can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services developed on top of blockchain technology. As DeFi expands and more platforms and projects come online, this could result in increased use and increased prices for crypto.
Developments in crypto payment methods
As the market for crypto grows, more and more companies are beginning using crypto to be a form of payment. This could lead to an increase in the use of crypto in everyday transactions and higher prices.
Increased investment from sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, it could increase demand and more expensive prices.
Cryptocurrency is used for international payments
One of the major benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses start to utilize crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be more convenient for consumers to purchase and hold crypto, which will increase demand and price.
Development of security tokens
Security tokens, also known as 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 issued and traded, it can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
As more and more retailers start accepting crypto as a form of payment, this will make it easier for customers to utilize and store cryptocurrency, which will drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors to consider, it’s likely that the cryptocurrency market will see a recovery in 2023. If you’re looking to invest for the long haul, being patient and disciplined will be key.