It’s been a tough journey for the cryptocurrency market in 2022. As of November the market was down by 70 percent from the previous high at the end of November. And just when things were going downhill after the FTX crash turned them worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced many drops in the past. Every time, it’s bounced back by a massive rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. In 2017, it broke the record and hit a record highest of $19,600. In 2018, the price was at $3,100. In 2020, it broke through that resistance, and reached a record high of $68,000 in November 2021. Just like that, we’ve had 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 typically followed by a long bull run, which eventually surpasses the resistance created by the previous market’s highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries adopting it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in increasing participation in the market which could 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 cryptocurrency. From hedge funds to banks, many large institutions are now exploring the possibilities in crypto currencies. The increasing interest from institutions can bring stability to the crypto market and could lead to more expensive prices.
Government regulations
As the crypto market grows as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more companies are starting to explore how they can make use of blockchain technology. This could stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like security and scalability, potential of crypto assets will increase. This could result in more adoption and higher prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic as well as other factors, more and more investors are beginning to look for safe haven investments like gold and crypto. Because the global economic climate is uncertain it could result in an increase in demand for crypto and more expensive prices.
Retail investors are able to earn interest
Investors from institutions aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. As more and more people learn about crypto and how to invest in it This could result in increased demand and higher prices.
The growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are starting to learn about and appreciate the concept. As understanding and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this can drive up prices.
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Decentralized finance (DeFi) is an emerging area of the crypto market that enables the provision of financial services developed using blockchain technology. As DeFi grows and more platforms and projects are launched, it could result in increased use and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are beginning using crypto to be a form of payment. This could result in increased usage of crypto in daily transactions, and a rise in prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as instruments for investing, are beginning to show interest in cryptocurrency as a possible asset class. As more of these funds allocate a portion or their entire portfolios to cryptocurrency, this could result in a rise in demand and more expensive prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
As the number of ATMs for crypto continue to grow it will be more convenient for individuals to purchase and keep crypto, which will increase demand and price.
Development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
More adoption by merchants
As more and more businesses start accepting crypto as a means of payment, it will make it easier for people to utilize and store crypto, which could drive up demand and prices.
So, will crypto grow in 2023? Only time will tell. With these things to consider, it’s possible that the crypto market could be able to see a rebound in 2023. If you’re committed to the long-term, being patient and disciplined is essential.