It’s been a rough journey for the cryptocurrency market in 2022. As of November the market was down by more than 70 percent from the previous high at the end of November. Just when the market was looking down, the FTX crash turned them even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin has experienced many dips in the past. And every time, it’s bounced back with a big increase.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year before hitting a low of $150. In 2017 it broke that record, and hit a new highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in the year 2020 it struck through that resistance and reached a new high of $68,000 in November 2021. Just like that, we’ve had another dip. However, history has shown 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 tend to be followed by a prolonged 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 technology and cryptography have come a long way in recent years. With more and better companies and industries taking to the technology, its use and acceptance is growing. From banking to gaming the use of crypto is increasing in a variety of ways. The growing popularity of crypto could result in more people being involved in the market, which in turn could boost prices.
The rise in interest of institutions in crypto
In recent times, we’ve seen a growing demand from investors of institutional scale in crypto. From banks to hedge funds and even large corporations are starting to explore the potential in crypto currencies. The increasing interest from institutions could bring more stability to the crypto market and lead to more expensive prices.
Regulations from the Government
As the market for crypto continues to mature and mature, governments across the globe are starting to create more favorable rules for crypto. This could help attract more investors and increase the adoption rate of crypto.
A broader range of blockchain applications
The technology that underlies the majority of cryptocurrencies, blockchain has a wide range of potential use cases that go beyond financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can benefit from blockchain technology, which could stimulate more investment and excitement in cryptocurrency.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas like security and scalability, potential of crypto assets will expand. This could lead to more use and increase in prices.
Rising global economic uncertainty
With the ongoing instability in the economy caused due to the COVID-19 pandemic and other factors many investors are looking for safe haven assets like bitcoin and even gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as higher prices.
Interest from retail investors
Investors from institutions aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors, are also starting to invest in the market for crypto. With increasing numbers of people are educated about crypto and how to invest in it, this could lead to more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto is maturing as more and more people are beginning to learn about it and comprehend it. As understanding and acceptance grows of crypto, this could lead to increasing numbers of people purchasing and holding crypto, which can drive up prices.
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market, which allows financial services to be developed upon blockchain technology. As DeFi expands and more projects and platforms are launched, it will lead to a rise in adoption and higher prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow as more and more businesses are beginning accepting crypto payments as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
The sovereign wealth fund, also known as owned by the state as investment vehicles, are beginning to show interest in crypto as a potential asset class. As more of these funds devote a percentage of their portfolio to crypto, it could increase demand and increased prices.
Cryptocurrency is used for international payments
One of the biggest benefits of crypto is the capability to perform quick and inexpensive cross-border payments. As more and more people and businesses 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 more convenient for individuals to purchase and store crypto, which could boost demand and increase prices.
The development of security tokens
Security tokens, also known as digital assets that represent ownership in an asset such as stock or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, this can lead to a higher demand, and thus higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more merchants begin accepting crypto as a means of payment, it makes it easier for people to utilize and store crypto, which can drive up demand and prices.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the cryptocurrency market will see a recovery in 2023. If you’re in it for the long-term, being patient and disciplined will be key.