It’s been a difficult ride for the crypto market until 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 things even more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. Each time, it’s bounced back by a massive rise.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for over a year before reaching a bottom 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. In 2020, the price broke through the resistance and reached a new highest of $68,000 in November 2021. Just like that, we’ve seen another dip. However, the past has proven that after each dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Just like we’ve seen previously, dips are typically followed by a long bull run that eventually breaks through the resistance created by the previous high price. This pattern is evident not only in Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in the last few years. With more and more businesses and industries adopting it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in many ways. The growing popularity of crypto could lead to increasing participation in the market and, in turn, increase the price.
Increased institutional interest in crypto
In the last few years, we’ve seen a growing interest from institutional investors in crypto. From hedge funds to banks, many large institutions are starting to explore the potential of crypto assets. This increased interest from institutions could bring more stability to the market for crypto and could lead to higher prices.
Regulations of the government
As the market for crypto continues to mature as it matures, governments all over the world are beginning to develop more favorable rules for cryptocurrency. This is likely to attract more investors and boost the adoption rate of crypto.
Blockchain has many more applications.
The underlying technology behind many cryptocurrencies, blockchain, is a broad range of applications that go that go beyond financial transactions. From supply chain management to voting systems, more industries are beginning to look at ways they can make use of blockchain technology. This could drive more investment and interest in crypto.
Technologies are constantly evolving.
Blockchain technology and cryptography are still in the beginning stages of development. As progress is made in areas like scalability and security, the potential of crypto assets will increase. This could lead to greater acceptance and higher prices.
Global economic uncertainty is growing
Due to the constant instability in the economy caused through the COVID-19 pandemic as well as other factors increasing numbers of investors are beginning to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as increased prices.
Interest from retail investors
Investors from institutions aren’t the only people who are interested in cryptocurrency. Retail investors, or individual investors are also beginning to participate in the cryptocurrency market. In the future, as more everyday people learn about crypto and the best ways to invest in it this could result in an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the crypto market grows, more and more people are beginning to learn about and understand it. As the awareness and acceptance of crypto grows, this could lead to increasing numbers of people purchasing and holding crypto, which can raise prices.
The Decentralized Finance (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services developed using blockchain technology. As DeFi grows and more projects and platforms come online, this could lead to increased adoption and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are beginning using crypto to be a means of payment. This could lead to an increase in the use of crypto in everyday transactions, and a rise in prices.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at crypto as a potential asset class. As more funds devote a percentage of their portfolio to crypto, this could increase demand and increased prices.
Utilization of crypto to make payment across borders
One of the main advantages of crypto is the ability to facilitate fast and cheap cross-border payments. As more and more people and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher costs.
The number of ATMs that accept crypto is increasing.
With the amount of ATMs that accept crypto increase it will be more convenient for people to buy and store crypto, which could increase demand and price.
The development of security tokens
Security tokens, which are digital assets that signify ownership in an asset such as stocks or real estate is a fast-growing segment of the cryptocurrency market. Since more and more security tokens will be issued and traded, it can lead to a higher demand and higher costs for cryptocurrency.
More adoption by merchants
As more and more merchants begin accepting crypto as a means of payment, this will make it easier for customers to use and hold crypto, which could boost demand and increase prices.
So, is crypto likely to grow in 2023? Only time will tell. However, with these aspects in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re in it for the long-term, being patient and disciplined is crucial.