It’s been a difficult experience for the crypto market in 2022. In November the market had dropped by more than 70% from its previous peak in November 2021. And just when things were looking down, the FTX crash made them look even worse. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. Every time, it has bounced back with a big rally.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for over a year before hitting a low of $150. In 2017, it broke that record and reached a new high of $19,600. Fast forward to 2018, it was trading at $3,100. In the year 2020 it struck that resistance and hit a new highest of $68,000 in 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
Just like we’ve seen before, fall-offs are typically followed by a lengthy bull run that eventually breaks through the resistance created by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain and cryptocurrency technology has progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is growing. From gaming to finance cryptocurrency is being utilized in a myriad of ways. This growing demand could lead to increasing participation in the crypto market, which in turn could drive the prices up.
The rise in interest of institutions in crypto
In the last few years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds numerous large institutions are starting to explore the possibilities for crypto-based assets. This increased interest from institutions could provide more stability to the market for crypto and result in more expensive prices.
Government regulations
As the crypto market continues to mature, governments around the world are beginning to develop more favorable regulations for crypto. This will help draw more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of possible applications that go beyond financial transactions. For example, from supply chain management and voting, many industries are starting to explore how they can benefit from blockchain technology. This will drive more investment and interest in crypto.
Technology advancements
Crypto and blockchain technology are at the very beginning of development. As progress is made in areas like scalability and security, the potential of crypto assets will increase. This could lead to more use and increase in prices.
Uncertainty in the global economy
In the current economic uncertainty brought on due to the COVID-19 pandemic, as well as other causes, more and more investors are looking for safe haven assets such as bitcoin and even gold. Since the economic outlook for the world is 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 individual investors are also beginning to get involved in the crypto market. With increasing numbers of 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 continues to mature as more and more people are beginning to learn about and appreciate the concept. As the awareness and acceptance of crypto grows, it will lead to more people purchasing or holding cryptocurrency, and this can increase prices.
the syndicate gaming crypto
The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables the provision of financial services created on top of blockchain technology. As DeFi grows and more projects and platforms become available, this could result in increased use and higher prices for crypto.
Advances in crypto-based payment methods
As the market for crypto grows increasing numbers of companies are starting 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 owned by the state as investment vehicles, are beginning to explore crypto as an asset class. As more of these funds devote a percentage of their portfolio to crypto, this could lead to increased demand and more expensive prices.
Use of crypto for cross-border payments
One of the main advantages of crypto is the ability to make fast and cheap cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto increase it will be more convenient for individuals to purchase and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that signify ownership of an asset, like stocks or real estate is a fast-growing sector of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand and consequently higher prices for crypto.
Merchants are more likely to adopt the concept.
In the event that more businesses accept crypto as a form of payment, this will make it more convenient for consumers to use and hold crypto, which can increase demand and price.
Will crypto be on the grow in 2023? Only time will tell. With these things in mind, it’s possible that the crypto market will see a recovery in 2023. And for those who are committed to the long haul, being patient and disciplined will be key.