It’s been a tough experience for the crypto market in 2022. In November the market was down by 70 percent from the previous high at the end of November. Just when the market was looking down and down, the FTX crash turned them worse. 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 rebounded with a huge rally.
For instance, in 2013, Bitcoin reached a peak of $1,160, then fell for more than a year, reaching a low of $150. However, in 2017, it broke the record and reached a new record high of $19,600. Fast forward to 2018, it was trading at $3,100. In 2020, the price broke that resistance and hit a new peak of $68,000 in the month of 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
As we’ve seen before, fall-offs are usually followed by a lengthy bull run that eventually surpasses the resistance created by the previous high price. This pattern is evident in not just Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have made significant progress in recent years. With more and better companies and industries adopting it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in a myriad of ways. This growing demand can lead to increasing participation in the crypto market, which in turn could increase the price.
Increased institutional interest in cryptocurrency
In recent years we’ve witnessed a rising interest from institutional investors in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential for crypto-based assets. The increasing interest from institutions could bring more stability to the market for crypto and result in greater prices.
Government regulations
As the crypto market grows, governments around the world are beginning to develop more favorable regulations for cryptocurrency. This is likely to attract more investors as well as increase the adoption rate of crypto.
More use cases for blockchain
The underlying technology behind the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond just financial transactions. In addition to supply chain management, voting and other systems companies are beginning to look at ways they can utilize blockchain technology, which could drive more investment and interest in cryptocurrency.
Advancements in technology
Crypto and blockchain technology are still in the early stages of development. As advancements continue to be made in areas like security and scalability, the potential of crypto assets will grow. This could result in more acceptance and higher prices.
Uncertainty in the global economy
With the ongoing economic uncertainty caused due to the COVID-19 pandemic as well as other factors many investors are starting to look for safe haven investments like gold and crypto. Since the economic outlook for the world is uncertain, this could lead to an increase in demand for crypto and higher prices.
Interest from retail investors
Institutional investors aren’t the only one who’s showing an interest in crypto. Retail investors, or even individual investors are also beginning to participate in the cryptocurrency market. As more and more everyday people learn about crypto and the best ways to invest in it this could result in more demand and higher prices.
The growing awareness and acceptance of cryptocurrency
As the market for crypto continues to mature, more and more people are beginning to become aware about it and comprehend it. As the awareness and acceptance of crypto grows it could result in increasing numbers of people purchasing as well as holding the crypto that can drive up prices.
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Financial decentralization (DeFi) is a rapidly growing area of the crypto market that allows the provision of financial services developed using blockchain technology. As DeFi grows and more projects and platforms become available, this will lead to a rise in adoption and more expensive prices for crypto.
Developments in crypto payment methods
As the market for crypto continues to grow increasing numbers of companies are starting to accept crypto as a means of payment. This could result in increased use of crypto in everyday transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are owned by the state as instruments for investing, are now beginning to show interest in cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could result in a rise in demand and increased prices.
Cryptocurrency is used for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate fast and cheap cross-border payments. As more individuals and businesses are beginning to make use of cryptocurrency for international transactions, this can lead to a rise in demand and higher costs.
Increasing numbers of crypto ATM’s
As the number of ATMs that accept crypto continue to increase it will be more convenient for people to buy and hold crypto, which will boost demand and increase prices.
The development of security tokens
Security tokens, which are digital assets that represent ownership of an asset, like stock or real estate, are a rapidly growing sector of the crypto market. As more security tokens are issued and traded, this can lead to a higher demand, and thus higher rates for the crypto.
More adoption by merchants
With the increasing number of businesses begin accepting crypto as a means of payment, this makes it easier for customers to utilize and store cryptocurrency, which will increase demand and price.
Will crypto be on the increase in 2023? The only way to know is time. However, with these aspects in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re in it for the long-term patience and discipline is crucial.