It’s been a tough experience for the crypto market through 2022. By November the market was down by more than 70 percent from the previous high at the end of November. And just when things were going downhill and down, the FTX crash turned things more dire. So, will the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin has had many dips in the past. Each time, it’s rebounded with a huge rally.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for a full year before hitting a low 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. 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. But history shows us that at the end of every dip there’s a bull-run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed 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 pattern can be seen in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have made significant progress in recent years. With more and more companies and industries taking to it, its usage and acceptance is increasing. From finance to gaming the use of crypto is increasing in many ways. The growing popularity of crypto could lead to more people getting involved in the market and, in turn, boost prices.
The rise in interest of institutions in crypto
In recent years we’ve noticed a growing demand from investors of institutional scale in crypto. From hedge funds to banks, many large institutions are starting to explore the possibilities of crypto assets. The increasing interest from institutions could bring more stability to the market for crypto and could lead to more expensive prices.
Regulations of the government
As the market for crypto grows as it matures, governments all over the world are beginning to establish more favorable rules for cryptocurrency. This will help draw more investors as well as increase the mainstream adoption of crypto.
More use cases for blockchain
The technology that underlies the majority of cryptocurrencies, blockchain is a broad range of potential use cases beyond the realm of financial transactions. For example, from supply chain management and voting, many companies are exploring ways they can benefit from blockchain technology, which could drive more investment and interest in crypto.
Blockchain and cryptocurrency technology is at the very beginning of development. As advancements continue to be made in areas such as scalability and security, the potential of crypto assets will continue to increase. This could lead to greater use and increase in prices.
Global economic uncertainty is growing
In the current economic uncertainty caused through the COVID-19 pandemic and other factors increasing numbers of investors are looking for safe haven assets such as gold and crypto. Since the economic outlook for the world is uncertain, this could lead to more demand for crypto as well as higher prices.
Interest from retail investors
Institutional investors aren’t the only ones showing interest in cryptocurrency. Retail investors, or even individual investors are also beginning to invest in the crypto market. In the future, as more people become aware of crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
A growing number of people are becoming aware of and accepting crypto
As the market for crypto is maturing, more and more people are beginning to learn about it and comprehend it. As understanding and acceptance grows of crypto, this could lead to more people buying or holding cryptocurrency, and this can raise prices.
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Decentralized finance (DeFi) is a rapidly growing area of the crypto market that allows financial services to be created using blockchain technology. As DeFi grows and more platforms and projects become available, this could result in increased use and increased prices for crypto.
The development of crypto payment methods
As the market for crypto grows increasing numbers of companies are starting to accept crypto as a form of payment. This could lead to increased use of crypto in regular transactions and higher prices.
Increased investment from sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are starting to explore cryptocurrency as a possible asset class. As more of these funds allocate a portion of their assets to digital currencies, it could result in a rise in demand and more expensive prices.
Use of crypto for payment across borders
One of the biggest benefits of cryptocurrency is its ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses begin to use crypto for international transactions, it could result in increased the demand for it and a rise in prices.
An increasing number of crypto ATM’s
With the amount of crypto ATM’s continue to increase it will be more convenient for consumers to purchase and keep crypto, which could increase demand and price.
Security tokens are developed for development
Security tokens, which are digital assets that represent ownership of an asset, like real estate or stock, are a rapidly growing area of the crypto market. Since more and more security tokens will be created and traded, this could result in a rise in demand and consequently higher rates for the crypto.
More adoption by merchants
With the increasing number of merchants begin accepting crypto as a form of payment, it will make it more convenient for consumers to hold and use cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. But with these factors in mind, it’s possible that the crypto market will have a rebound by 2023. If you’re looking to invest for the long-term, being patient and disciplined is essential.