It’s been a rough ride for the crypto market in 2022. In November the market was down by 70% from its previous peak in November 2021. When things were going downhill after the FTX crash made them look even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has had its fair share of dips over the years. Each time, it has bounced back with a big rally.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year, reaching a low of $150. In 2017 it broke that record and hit a record highest of $19,600. In 2018, it was trading at $3,100. In 2020, it broke through the resistance, and reached a record highest of $68,000 in November 2021. Then, just like that we’ve had another dip. 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
Similar to what we’ve witnessed in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This is evident in more than Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has made significant progress in recent years. With more and more companies and industries adopting the technology, its use and acceptance is rising. From gaming to finance, crypto is being used in many ways. And this growing use case could lead to more people getting involved in the market, which in turn could boost prices.
The rise in interest of institutions in cryptocurrency
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds, many large institutions are starting to explore the possibilities in crypto currencies. The increased interest of institutions could provide more stability to the market for crypto and lead to greater prices.
As the market for crypto continues to mature, governments around the world are beginning to develop more favorable rules for cryptocurrency. This could help attract more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies many cryptocurrency, blockchain, has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many industries are exploring ways they can make use of blockchain technology, which could drive more investment and interest in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the beginning stages of development. As advances continue to be made in areas like scalability and security, the potential of cryptocurrency assets will continue to expand. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
With the ongoing economic uncertainty caused through the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to increased demand for crypto and more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in cryptocurrency. Retail investors, or even individual investors, are also starting to invest in the cryptocurrency market. With increasing numbers of everyday people learn about crypto and how to invest in it this could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto grows increasing numbers of people are starting to learn about it and comprehend it. As awareness and acceptance of cryptocurrency grows, this could lead to more people buying and holding crypto, which can increase prices.
meme coins overtakes crypto fanatics
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services built on top of blockchain technology. As DeFi grows and more platforms and projects become available, this will lead to a rise in adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows increasing numbers of companies are beginning using crypto to be a method 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 government-owned investments, are starting to show interest in crypto as a potential asset class. As more funds allocate a portion or their entire portfolios to cryptocurrency, this could increase demand and higher prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. 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.
An increasing number of crypto ATM’s
With the amount of ATMs that accept crypto increase, it will become easier for consumers to purchase and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, or digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a form of payment, it will make it easier for consumers to hold and use crypto, which could increase demand and price.
So, is crypto likely to rise in 2023? Only time will tell. But with these factors in mind, it’s likely that the crypto market will see a recovery in 2023. For those looking to invest for the long haul patience and discipline will be key.