It’s been a tough journey for the cryptocurrency market in 2022. As of November, the market had dipped by more than 70 percent from its previous high on November 20, 2021. Just when the market was getting worse after the FTX crash turned them even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of drops in the past. Each time, it has bounced back with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year, reaching a low of $150. But, in 2017, it broke that record, and hit a new highest of $19,600. Then, in 2018, it was trading at $3,100. And in 2020, it broke through the resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve had another dip. 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 previously, dips are typically followed by a lengthy bull run that finally surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot 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. The growing popularity of crypto could lead to increasing participation in the market, which in turn could increase the price.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential of crypto assets. The increased interest of institutions could provide more stability to the crypto market and result in higher prices.
Regulations of the government
As the market for crypto grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This could help attract more investors and boost the acceptance of crypto in general.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, offers a variety of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are beginning to look at ways they can benefit from blockchain technology, which could increase investment and enthusiasm in crypto.
Advancements in technology
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas like security and scalability, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused by the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets like gold and crypto. Since the economic outlook for the world remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the market for crypto. As more and more people become aware of crypto and the best ways to invest in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing, more and more people are beginning to learn about and appreciate it. As awareness and acceptance of cryptocurrency grows it could result in more people purchasing as well as holding the crypto that could increase prices.
missing cost basis crypto
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be built using blockchain technology. As DeFi continues to grow and more projects and platforms come online, this could lead to increased adoption and increased prices for crypto.
The development of crypto payment methods
As the crypto market is growing increasing numbers of companies are starting accepting crypto payments as a form of payment. This could lead to increased use of crypto in everyday transactions and higher prices.
More investment from sovereign wealth funds
These funds are government-owned investments, are now beginning to show interest in crypto as an 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.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is its ability to facilitate fast and cheap cross-border payments. As more and more people and businesses begin to use cryptocurrency for international transactions it could result in increased demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of crypto ATM’s continue to grow it will be easier for individuals to purchase and keep crypto, which could drive up demand and prices.
Development of security tokens
Security tokens, which are digital assets that represent ownership in an asset like stock or real estate are rapidly expanding segment of the cryptocurrency market. With the increasing number of security tokens being issued and traded, this can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? The only way to know is time. However, with these aspects being considered, it’s likely that the crypto market could be able to see a rebound in 2023. If you’re looking to invest for the long run Being patient and disciplined is crucial.