It’s been a rough experience for the crypto market through 2022. By November the market had dropped by 70 percent from its previous high in November 2021. Just when the market was going downhill and down, 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 experienced many drops in the past. And every time, it’s rebounded with a big increase.
For example, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for a full year before reaching a bottom of $150. However, in 2017, it broke that record and hit a record highest of $19,600. Fast forward to 2018, it was trading at $3,100. And in 2020, it broke through the resistance and hit a new peak of $68,000 in the month of November 2021. And just like that, we’ve had another dip. However, the past has proven 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 in the past, dips are usually followed by a prolonged bull run, which eventually overcomes the resistance set by the previous high price. This pattern can be seen in more than Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have come a long way in recent years. With more and more businesses and industries taking to it, its usage and acceptance is rising. From gaming to finance cryptocurrency is being utilized in a myriad of ways. The growing popularity of crypto can lead to increasing participation in the crypto market, which in turn could drive the prices up.
A rise in the interest of institutions for crypto
In recent years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the potential in crypto currencies. The increased interest of institutions could bring more stability to the crypto market and could lead to more expensive prices.
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable regulations 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 the majority of cryptocurrencies, blockchain has a wide range of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many companies are exploring 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 beginning stages of development. As progress is made in areas such as security and scalability, potential of cryptocurrency assets will continue to grow. This could result in more use and increase in prices.
Uncertainty in the global economy
With the ongoing instability in the economy caused through the COVID-19 pandemic and other factors increasing numbers of investors are starting to look for safe haven investments like cryptocurrency and gold. Because the global economic climate remains uncertain it could result in more demand for crypto as well as increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors, are also starting to get involved in the market for crypto. As more and more everyday people become aware of cryptocurrency and investing in it, this could lead to increased demand and higher prices.
Growing awareness and acceptance of crypto
As the crypto market is maturing, more and more people are beginning to become aware about and understand the concept. As awareness and acceptance grows of crypto, it will lead to more people buying or holding cryptocurrency, and this could drive up prices.
Financial decentralization (DeFi) is an area that is rapidly expanding in the crypto market, which allows finance services created on top of blockchain technology. As DeFi continues to grow 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 grows, more and more companies are beginning accepting crypto payments as a form of payment. This could lead to increased usage of crypto in daily transactions and an increase in the cost of transactions.
Increased investment from sovereign wealth funds
These funds are government-owned instruments for investing, are now beginning to look at cryptocurrency as a possible asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could result in a rise in demand and increased prices.
Utilization of crypto to make cross-border payments
One of the biggest benefits of crypto is its ability to make swift and affordable cross-border transactions. As more and more people and businesses begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
Increasing numbers of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and hold crypto, which will drive up demand and prices.
Security tokens are developed for development
Security tokens, or digital assets that signify ownership of an asset, like stock or real estate are rapidly expanding segment of the cryptocurrency market. Since more and more security tokens will be created and traded, this could result in a rise in demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
As more and more merchants start accepting cryptocurrency as a method of payment, it makes it easier for consumers to hold and use cryptocurrency, which will increase demand and price.
So, is crypto likely to grow in 2023? It’s only time to find out. However, with these aspects to consider, it’s possible that the crypto market could see a recovery in 2023. And for those who are in it for the long run patience and discipline is essential.