It’s been a tough ride for the crypto market through 2022. As of November the market was down by more than 70% from its previous peak in November 2021. And just when things were looking down after the FTX crash turned things worse. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The cryptocurrency market, specifically Bitcoin, has seen many dips over the years. And every time, it’s bounced back with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. Then it fell for a full year before reaching a bottom of $150. In 2017 it broke that record, and hit a new record high of $19,600. Then, in 2018, the price was at $3,100. And in 2020, the price broke through that resistance and reached a new highest of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, history has shown us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen before, fall-offs are typically followed by a long bull run that finally surpasses the resistance created by the market’s previous highest price. This pattern is evident not only in Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have come a long way in the last few years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From banking to gaming the use of crypto is increasing in a variety of ways. And this growing use case could result in increasing participation in the market, which in turn could boost prices.
Increased institutional interest in cryptocurrency
In recent times we’ve witnessed a rising curiosity from institutions investing in cryptocurrency. From hedge funds to banks and even large corporations are starting to explore the possibilities for crypto-based assets. The increased interest of institutions could bring more stability to the market for crypto and result in more expensive prices.
As the market for crypto grows as it matures, governments all over the world are starting to create more favorable rules for cryptocurrency. This is likely to attract more investors as well as increase the acceptance of crypto in general.
Blockchain has many more applications.
The technology that underlies many cryptocurrencies, blockchain, is a broad range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more industries are starting to explore how they can utilize blockchain technology. This will drive more investment and interest in cryptocurrency.
Technologies are constantly evolving.
Blockchain and cryptocurrency technology is at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will expand. This could lead to greater acceptance and higher prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused due to the COVID-19 pandemic, as well as other causes many investors are looking for safe haven investments like gold and crypto. Since the economic outlook for the world 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 people who are interested in cryptocurrency. Retail investors, also known as individual investors, are also starting to invest in the market for crypto. As more and more everyday people learn about crypto and the best ways to invest 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 market for crypto grows, more and more people are beginning to learn about it and comprehend the concept. As awareness and acceptance of crypto grows, this could lead to more people buying and holding crypto, which could increase prices.
mural paint crypto
Financial decentralization (DeFi) is an emerging area of the crypto market that enables finance services developed upon blockchain technology. As DeFi continues to grow and more platforms and projects 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 is growing as more and more businesses are beginning using crypto to be a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
These funds are state-owned investment vehicles, are now beginning to look at crypto as an asset class. As more funds dedicate a part of their assets to digital currencies, it could increase demand and higher prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the capability to perform fast and cheap cross-border payments. As more businesses and individuals begin to use crypto for international transactions, this could lead to increased demand and higher prices.
Increasing numbers of crypto ATM’s
The number of ATMs that accept crypto continue to grow it will be easier for people to buy and hold crypto, which could drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, such as stock or real estate is a fast-growing sector of the crypto market. Since more and more security tokens will be created and traded, it could result in a rise in demand, and thus higher prices for crypto.
More adoption by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, this makes it easier for consumers to hold and use crypto, which can increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. With these things in mind, it’s possible that the crypto market could be able to see a rebound in 2023. And for those who are looking to invest for the long-term patience and discipline is essential.