It’s been a difficult journey for the cryptocurrency market in 2022. By November the market was down by 70 percent from its previous high at the end of November. And just when things were going downhill, the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin, has seen many drops in the past. And every time, it’s bounced back by a massive rally.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for more than a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new record high of $19,600. Fast forward to 2018, and it was trading at $3,100. And in 2020, it broke through the resistance and reached a new high of $68,000 in November 2021. And 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
Similar to what we’ve witnessed in the past, dips are typically followed by a long 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
Crypto and blockchain technology have progressed a lot in the last few years. With more and more companies and industries embracing it, its usage and acceptance is increasing. From gaming to finance cryptocurrency is being utilized in many ways. This growing demand could result in more people getting involved in the crypto market and, in turn, drive the prices up.
A rise in the interest of institutions for cryptocurrency
In recent times, we’ve seen a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are now exploring the potential of crypto assets. The increased interest of institutions can bring stability to the market for crypto and result in greater prices.
Regulations of the government
As the crypto market grows, governments around the world are beginning to establish more favorable regulations for cryptocurrency. This will help draw more investors and boost the mainstream adoption of crypto.
Blockchain has many more applications.
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of potential use cases that go beyond financial transactions. From supply chain management to voting systems, more and more industries are exploring ways they can utilize blockchain technology. This will increase investment and enthusiasm in cryptocurrency.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As advances continue to be made in areas such as security and scalability, potential of crypto assets will increase. This could lead to more acceptance and higher prices.
Uncertainty in the global economy
In the current economic uncertainty brought on by the COVID-19 pandemic, as well as other causes increasing numbers of investors are beginning to look for safe haven assets like bitcoin and even gold. Since the economic outlook for the world remains uncertain it could result in more demand for crypto as well as higher prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in people who are interested in crypto. Retail investors, also known as individual investors are also beginning to participate in the market for crypto. In the future, as more people are educated about cryptocurrency and investing in it This could result in more demand and higher prices.
Growing awareness and acceptance of cryptocurrency
As the market for crypto is maturing as more and more people are beginning to become aware about and understand it. As the awareness and acceptance of crypto grows it could result in more people buying as well as holding the crypto that could increase prices.
tech wants to gamify using crypto
The Decentralized Finance (DeFi) is an emerging area of the crypto market, which allows finance services built on top of blockchain technology. As DeFi expands 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 crypto market continues to grow, more and more companies are starting to accept crypto as a means of payment. This could lead to increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are state-owned instruments for investing, are starting to look at crypto as a potential asset class. As more of these funds dedicate a part or their entire portfolios to cryptocurrency, this could lead to increased demand and increased prices.
Utilization of crypto to make cross-border payments
One of the main advantages of cryptocurrency is its capability to perform fast and cheap cross-border payments. As more businesses and individuals start to utilize cryptocurrency for international transactions this can lead to a rise in demand and higher costs.
The number of ATMs that accept crypto is increasing.
As the number of crypto ATM’s increase, it will become easier for people to buy and keep crypto, which could boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that signify ownership of an asset, such as real estate or stock, are a rapidly growing sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand and higher prices for crypto.
More adoption by merchants
In the event that more businesses accept crypto as a form of payment, this will make it more convenient for people to hold and use crypto, which could boost demand and increase prices.
So, will crypto grow in 2023? Only time will tell. But with these factors being considered, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long run, being patient and disciplined is essential.