It’s been a difficult ride for the crypto market through 2022. In November, the market had dipped by more than 70% from its previous peak at the end of November. Just when the market was going downhill and down, the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips over the years. Every time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year before hitting a low of $150. But, in 2017, it broke the record and reached a new highest of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through the resistance and hit a new highest of $68,000 in November 2021. Then, 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
As we’ve seen previously, dips tend to be followed by a long bull run that eventually breaks through the resistance created by the market’s previous highest price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more businesses and industries taking to the technology, its use and acceptance is rising. From banking to gaming the use of crypto is increasing in a myriad of ways. And this growing use case can lead to more people getting involved in the crypto market and, in turn, boost prices.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities of crypto assets. The increased interest of institutions can bring stability to the crypto market and could lead to higher prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to establish more favorable rules for cryptocurrency. This is likely to attract more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The underlying technology behind many cryptocurrencies, blockchain, offers a variety of possible applications that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are starting to explore how they can utilize blockchain technology. This could increase investment and enthusiasm in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advances continue to be made in areas such as scalability and security, the potential of cryptocurrency assets will continue to grow. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty caused due to the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets such as bitcoin and even gold. As the global economic situation is uncertain it could result in more demand for crypto as well as more expensive prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors, are also starting to invest in the cryptocurrency market. As more and more people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
A growing number of people are becoming aware of and accepting crypto
As the crypto market grows as more and more people are starting to learn about it and comprehend it. As understanding and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which could increase prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services created upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
The development of crypto payment methods
As the crypto market grows, more and more companies are starting accepting crypto payments as a method of payment. This could lead to increased usage of crypto in daily transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to show interest in crypto as a potential asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and increased 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 and more people and businesses start to utilize cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be more convenient for individuals to purchase and hold cryptocurrency, which can boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as stocks or real estate are rapidly expanding area of the crypto market. As more security tokens are created and traded, this could result in a rise in demand and higher rates for the crypto.
Merchants are more likely to adopt the concept.
In the event that more retailers begin accepting crypto as a means of payment, this will make it more convenient for consumers to utilize and store crypto, which can drive up demand and prices.
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 will see a recovery in 2023. If you’re committed to the long run patience and discipline is essential.