It’s been a difficult ride for the crypto market in 2022. By November the market had dropped by more than 70% from its previous peak at the end of November. And just when things were getting worse after the FTX crash made them look worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips over the years. Every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year, reaching a low of $150. However, in 2017, it broke that record and reached a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. But history shows us 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 lengthy bull run that finally overcomes the resistance set by the market’s previous highest price. This pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and more companies and industries taking to the technology, its use and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto can lead to more people getting involved in the market which could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in crypto. From hedge funds to banks, many large institutions are beginning to investigate the possibilities for crypto-based assets. This increased interest from institutions could bring more stability to the market for crypto and 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 could help attract more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, has a wide range of applications that go beyond just financial transactions. From supply chain management to voting systems, more and more industries are starting to explore how they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Technology advancements
Blockchain technology and cryptography are at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of cryptocurrency assets will continue to expand. This could lead to more acceptance and higher prices.
Rising global economic uncertainty
In the current economic uncertainty brought on through the COVID-19 pandemic and other factors, more and more investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain it could result in an increase in demand for crypto and higher prices.
Interest from retail investors
The institutional investors aren’t alone in one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors are also beginning to participate in the market for crypto. As more and more people become aware of crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows increasing numbers of people are beginning to learn about and understand the concept. As understanding and acceptance of cryptocurrency grows, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
l block crypto
Financial decentralization (DeFi) is an emerging area of the crypto market that allows finance services developed upon blockchain technology. As DeFi grows and more projects and platforms become available, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto continues to grow, more and more companies are beginning to accept crypto as a means of payment. This could lead to an increase in the use of crypto in everyday transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are owned by the state as investment vehicles, 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 result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the main advantages of crypto is the ability to facilitate swift and affordable cross-border transactions. As more and more people and businesses begin to use cryptocurrency for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto increase it will be more convenient for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, also known as digital assets that signify ownership in an asset such as stocks or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, it could lead to increased demand and higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of businesses accept crypto as a means of payment, this makes it easier for customers to hold and use crypto, which could boost demand and increase prices.
Will crypto be on the grow in 2023? Only time will tell. But with these factors to consider, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long haul Being patient and disciplined will be key.