It’s been a rough ride for the crypto market until 2022. As of November the market was down by more than 70% from its previous peak on November 20, 2021. Just when the market was looking down and down, the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced its fair share of drops in the past. And every time, it has bounced back with a big rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low of $150. But, in 2017 it broke that record and hit a record highest of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, the price broke through that resistance and hit a new peak of $68,000 in the month of November 2021. Just like that, we’ve witnessed another drop. However, history has shown 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 in the past, dips are typically followed by a prolonged bull run that eventually breaks through the resistance created by the previous market’s highest price. This pattern can be seen 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 more businesses and industries taking to it, its usage and acceptance is growing. From gaming to finance, crypto is being used in a myriad of ways. The growing popularity of crypto could lead to more people being involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing demand from investors of institutional scale in crypto. From hedge funds to banks and even large corporations are starting to explore the potential for crypto-based assets. This increased interest from institutions can bring stability to the crypto market and lead to greater prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to develop more favorable rules for crypto. This will help draw more investors as well as increase the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems industries are starting to explore how they can benefit from blockchain technology. This could drive more investment and interest in crypto.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will continue to grow. This could lead to more adoption and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on by the COVID-19 pandemic as well as other factors, more and more investors are looking for safe haven investments like bitcoin and even gold. Since the economic outlook for the world remains 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 cryptocurrency. Retail investors, also known as individual investors are also beginning to invest in the crypto market. As more and more people become aware of 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 market for crypto is maturing, more and more people are beginning to learn about and appreciate it. As the awareness and acceptance of cryptocurrency grows, this could lead to more people buying as well as holding the crypto that could drive up prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto grows as more and more businesses are starting to accept crypto 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 instruments for investing, are beginning to explore crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and higher prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to increase it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand and consequently higher rates for the crypto.
A greater adoption rate by merchants
In the event that more businesses accept cryptocurrency as a method of payment, this will make it more convenient for people to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? The only way to know is time. But with these factors in mind, it’s likely that the cryptocurrency market will see a recovery in 2023. And for those who are looking to invest for the long haul patience and discipline will be key.