It’s been a rough ride for the crypto market until 2022. As of November the market was down by more than 70% from its previous peak in November 2021. Just when the market was going downhill, the FTX crash turned things even more dire. What is the likelihood that the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The market for crypto, particularly Bitcoin, has seen many dips in the past. And every time, it’s bounced back with a huge rise.
In 2013, for instance, Bitcoin reached a peak of $1,160, then fell for over a year, reaching a low of $150. However, in 2017, it broke that record, and hit a new high of $19,600. Then, in 2018, the price was at $3,100. And in the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. And just like that, we’ve witnessed another drop. 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
Similar to what we’ve witnessed before, fall-offs tend to be followed by a prolonged bull run that finally breaks through the resistance created by the previous market’s highest price. This pattern can be seen in more than Bitcoin but also other cryptocurrencies.
Growing Use of Crypto and Blockchain
Blockchain technology and cryptography have progressed a lot in recent years. With more and more companies and industries adopting it, its usage and acceptance is rising. From banking to gaming, crypto is being used in a variety of ways. And this growing use case can lead to more people being involved in the market, which in turn could increase the price.
The rise in interest of institutions in cryptocurrency
In recent times we’ve noticed a growing curiosity from institutions investing in cryptocurrency. From banks to hedge funds, many large institutions are starting to explore the potential in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations of the government
As the market for crypto grows and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This will help draw more investors and increase the mainstream adoption of crypto.
More use cases for blockchain
The underlying technology behind many cryptocurrency, blockchain, offers a variety of potential use cases beyond just financial transactions. For example, from supply chain management and voting, many and more industries are beginning to look at ways they can benefit from blockchain technology. This will stimulate more investment and excitement in cryptocurrency.
Blockchain and cryptocurrency technology is at the very beginning of development. As advances continue to be made in areas like scalability and security, the potential of crypto assets will continue to increase. This could result in more use and increase in prices.
Global economic uncertainty is growing
Due to the constant economic uncertainty brought on through the COVID-19 pandemic as well as other factors increasing numbers of investors are looking for safe haven assets such as cryptocurrency and gold. As the global economic situation is uncertain, this could lead to more demand for crypto as well as increased prices.
Retail investors are able to earn interest
The institutional investors aren’t alone in ones showing interest in cryptocurrency. Retail investors, or even individual investors, are also starting to participate in the market for crypto. With increasing numbers of people learn about cryptocurrency and investing in it, this could lead to an increase in demand and consequently higher prices.
Growing awareness and acceptance of crypto
As the market for crypto continues to mature as more and more people are starting to learn about and appreciate the concept. As the awareness and acceptance of cryptocurrency grows it could result in more people buying as well as holding the crypto that could raise prices.
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The Decentralized Finance (DeFi) is an emerging area of the crypto market that allows financial services to be built using 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 grows increasing numbers of companies are starting to accept crypto as a method of payment. This could result in increased use of crypto in regular transactions and higher prices.
The increased investment of sovereign wealth funds
These funds are owned by the state as investments, are now beginning to explore crypto as an asset class. As more funds devote a percentage or their entire portfolios to cryptocurrency, this could increase demand and more expensive prices.
Utilization of crypto to make payment across borders
One of the biggest benefits of crypto is the ability to facilitate swift and affordable cross-border transactions. As more individuals and businesses are beginning to make use of 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
As the number of ATMs for crypto continue to increase it will be more convenient for people to buy and keep cryptocurrency, which can drive up demand and prices.
The development of security tokens
Security tokens, also known as digital assets that are used to represent ownership of an asset, such as real estate or stock, are a rapidly growing area of the crypto market. As more security tokens are issued and traded, it could result in a rise in demand, and thus higher costs for cryptocurrency.
Merchants are more likely to adopt the concept.
In the event that more merchants accept crypto as a means of payment, this makes it easier for people to hold and use crypto, which can drive up demand and prices.
So, is crypto likely to grow in 2023? The only way to know is time. But with these factors in mind, it’s possible that the crypto market could have a rebound by 2023. If you’re looking to invest for the long haul patience and discipline will be key.