It’s been a tough ride for the crypto market in 2022. By November, the market had dipped by more than 70 percent from its previous high at the end of November. Just when the market was looking down and down, the FTX crash turned things even worse. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has experienced its fair share of drops in the past. Each time, it’s bounced back with a huge increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. It then plummeted for a full year before hitting a low of $150. But, in 2017, it broke the record and reached a new high of $19,600. Then, in 2018, and it was trading at $3,100. And in the year 2020 it struck that resistance, and reached a record highest of $68,000 in November 2021. And just like that, we’ve had another dip. But history shows us that after each dip the bull runs.
Every Dip is Followed by a Long Bull Run
As we’ve seen before, fall-offs are typically followed by a long bull run that eventually overcomes the resistance set by the previous market’s highest price. This pattern is evident in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has come a long way in recent years. With more and more companies and industries embracing the technology, its use and acceptance is growing. From gaming to finance, crypto is being used in a variety of ways. And this growing use case could lead to more people getting involved in the market and, in turn, boost prices.
A rise in the interest of institutions for cryptocurrency
In the last few years we’ve witnessed a rising demand from investors of institutional scale in cryptocurrency. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and result in higher prices.
As the crypto market grows as it matures, governments all over the world are beginning to establish more favorable rules for crypto. This will help draw more investors and boost the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, is a broad range of possible applications beyond the realm of financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can utilize blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the early stages of development. As advances continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors many investors are beginning to look for safe haven assets such as gold and crypto. Because the global economic climate remains uncertain and uncertain, this could lead to more demand for crypto as well as more expensive prices.
Retail investors are able to earn interest
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or individual investors are also beginning to invest in the cryptocurrency market. With increasing numbers of everyday people learn about cryptocurrency and investing in it this could result in increased 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 beginning to learn about and understand the concept. As awareness and acceptance grows of crypto it could result in more people purchasing or holding cryptocurrency, and this could increase prices.
Decentralized finance (DeFi) is a rapidly growing area of the crypto market that enables finance services built using blockchain technology. As DeFi expands and more platforms and projects come online, this could lead to increased adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market continues to grow as more and more businesses are beginning to accept crypto as a means of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
The sovereign wealth fund, also known as state-owned investments, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their assets to digital currencies, this could lead to increased demand and increased prices.
Use of crypto for payment across borders
One of the biggest benefits of crypto is its ability to make quick and inexpensive cross-border payments. As more businesses and individuals start to utilize crypto for international transactions, this can lead to a rise in the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
As the number of ATMs for crypto continue to increase it will be easier for consumers to purchase and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset such as real estate or stock are rapidly expanding area of the crypto market. With the increasing number of security tokens being issued 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, it will make it more convenient for people to use and hold crypto, which can increase demand and price.
So, is crypto likely to grow in 2023? The only way to know is time. With these things in mind, it’s likely that the crypto market will have a rebound by 2023. If you’re looking to invest for the long run, being patient and disciplined will be key.