The year 2022 has been quite a rollercoaster ride for crypto users. From newbies to experienced investors, everyone has seen how volatile the markets can be, and how promising global ranking projects can come crashing down in mere days. In such an atmosphere it is given that you are probably wondering about the future of crypto and what you can expect for this asset market in 2023. Well, you don’t have to scratch your head on it anymore because in this article we have simplified everything you need to know about what the future of crypto looks like.
A brief Overview of Cryptocurrency for Beginners
If you have just stepped foot in the bizarre world of digital assets, then crypto can seem quite daunting to you. But don’t worry because we have it all briefly summarised for you.
Cryptocurrencies, such as Bitcoin and Ethereum, have been gaining significant attention and adoption in recent years. These digital assets use cryptography to secure their transactions and to verify the transfer of ownership. They are decentralized, meaning they are not controlled by any central authority, such as a government or financial institution.
One of the main benefits of cryptocurrencies is that they allow for peer-to-peer transactions without the need for a third party intermediary. This means that transactions can be made directly between individuals, without the need for a bank or other financial institution to facilitate the transfer. This can make transactions faster and cheaper, as there are no fees for using a third party service.
Cryptocurrencies also offer increased security and anonymity compared to traditional financial systems. Transactions are recorded on a public ledger called the blockchain, which makes it difficult to forge or alter transactions. In addition, the use of cryptography and decentralized systems makes it difficult for hackers to compromise the security of the system.
Despite these benefits, cryptocurrencies also have some drawbacks. One of the main concerns is their volatility, as the value of cryptocurrencies can fluctuate significantly in a short period of time. This can make them risky for investors and can make it difficult to use them as a reliable store of value. In addition, the decentralized nature of cryptocurrencies can make them more susceptible to fraud and other illegal activities, as it can be difficult to trace the parties involved in a transaction.
Learn more: Should I invest in cryptocurrencies in 2023?
Bitcoin to Find Bottom in 2023
One of the major things you can expect in 2023 is the Bitcoin bottom. The term “Bitcoin bottom” refers to the lowest price that Bitcoin has reached in a given market cycle. Bitcoin, like many other assets, experiences price fluctuations and moves through cycles of bull markets (when prices are rising) and bear markets (when prices are falling).
When the price of Bitcoin reaches its bottom, it can be a good time for investors to consider buying the cryptocurrency. This is because the price is likely to increase as the market recovers from the bear market and enters a bull market. However, it is important to note that predicting the bottom of a market can be difficult, and buying Bitcoin or any other asset at the bottom is not guaranteed to be a profitable investment.
According to technical analysis by experts, a bottom of 12.8K USD is expected in 2023. In the previous, during the Bitcoin relief rally in 2019, the price had gone to 13.5 K dollars USD. Hence you can consider monthly support to be around 13K USD and technical pieces of evidence suggest that there could be a bottom formation.
If we take an optimistic outlook on the situation and assume that we receive the bitcoin bottom in a few weeks, then there is a possibility that the bottom will be around 15K USD. Let’s look at the on-chain analysis that supports this scenario. On 15K you have the on-chain support, the balance price is roughly a little more than 15K, and the CVDD floor is around 16K.
The sentiments surrounding the bitcoin bottom, which is the general public perception, suggest that the bottom could go to 10 K dollars. This goes to show that in case of a major market event like the crashing of big exchanges like Binance or negative news surrounding entities like DCG could potentially lead the price to drop down to 10K Dollars.
Even though the likelihood of this happening is slightly low, a potential recession in the US could also drop the price even below 10K. However, as of now, this seems to be the worst case scenario only.
Also check: Is DCG selling their assets before filing for bankruptcy?
Better Crypto Regulation
Crypto regulation, especially in America, is one of the most likely things we see happening with crypto in 2023. The growth of cryptocurrency adoption may also lead to increased regulatory attention and efforts to create uniform standards and guidelines. Governments and regulatory bodies may seek to better understand and address the potential risks and benefits of cryptocurrencies, including their use for money laundering and financing of illegal activities.
As US Bill regulating these currencies is already drafted it could lead to increasing consumer protection. It would lead to a creation of a listing framework and to list any crypto project on a US exchange will have to be defined which will come under securities and commodity.
There will be the generation of many laws that could aid in reducing the volume of scams and lead to investing in only select coins hence increasing the chances of better returns. Along with that big players will enter the market and the size of the crypto market could possibly even increase to 10 trillion dollars during the bull run. With regulation, the volatility of the market could also reduce which might stop some coins from reaching 100x in the next bull run.
Read out article on Why proper regulations will help to develop tokenized stocks?
Potential Crypto Trends in 2023
Even though the market is down currently, we can see many trends that could either be profitable or bring in losses. Users can earn money on some trends even during a bad market. For example, many people earned money on GMX, Cap Finance, Solana NFT and many more. This goes to demonstrate that trends will be coming frequently. You need to be aware and acquire as much insight and information about the market and recent developments.
If you are not a long-term investor, you can also focus on short term entry and exit. Long term investment is better for those who have a lot more stable income and can afford to keep that amount aside for crypto
Some trends you can expect to see in the coming year include EIP 4844, dropping of Ethereum gas fee by around 50 per cent, short term rally of Ethereum, rise of layer 2 solutions, growth of play2earn games, polarising of decentralised exchanges (DEXs), and Zero-knowledge proofs (ZKPs) development.
Also read CEX vs DEX vs HEX: Crypto Exchanges Compared 2022
Growth of Stablecoins and DeFi
One potential development in the cryptocurrency space in 2023 is the increased use of stablecoins. Stablecoins are cryptocurrencies that are pegged to the value of a real-world asset, such as the US dollar, and are designed to minimize price volatility. They may become more popular as a means of exchange and store of value, particularly in countries with unstable fiat currencies.
Another trend that may continue in 2023 is the use of decentralized finance (DeFi) platforms. DeFi platforms are built on blockchain technology and allow for decentralized lending, borrowing, and trading of cryptocurrencies and other assets. They have the potential to revolutionize traditional financial services by offering faster, cheaper, and more transparent alternatives.
If you are curious about DeFi, check our article Want to start earning DeFi rewards? Here’s what you need to know
Frequently asked questions
What is Bitcoin Relief Rally?
A Bitcoin relief rally is a temporary increase in the price of Bitcoin after a period of decline. It occurs when there is positive news or events in the market that brings optimism and encourage buying, leading to an increase in the price of the cryptocurrency.
There are several factors that may contribute to a Bitcoin relief rally, including positive news about the adoption or regulation of cryptocurrencies, the entry of institutional investors into the market, and the overall sentiment of the market.
What is on-chain analysis?
On-chain analysis refers to the process of analyzing the transaction activity on a blockchain to gain insights into the behaviour and usage of the blockchain or cryptocurrency in question.
On-chain analysis can be useful for a variety of purposes, including market analysis, risk assessment, and fraud detection. It can provide insights into the overall health and usage of a blockchain and can help identify trends and patterns that may not be evident from other types of data.
What are layer 2 solutions?
Layer 2 solutions refer to protocols or technologies that operate on top of a blockchain network (the “layer 1” solution) to improve scalability, privacy, and other aspects of the network. One common type of layer 2 solution is the use of off-chain transactions, which allow for the transfer of value without the need to record every transaction on the blockchain.
While they can provide significant benefits, they may also introduce additional complexity and potential security risks, and their adoption and use may vary depending on the specific blockchain and use case.
To conclude
Looking ahead to 2023, it is difficult to predict exactly how cryptocurrencies will develop. However, it is likely that we will see continued adoption and mainstream acceptance of these digital assets. With the increasing use of digital technologies and the growing demand for faster and more efficient financial systems, it is possible that cryptocurrencies could play a more significant role in the global economy.
Overall, the future of cryptocurrencies in 2023 looks promising, with the potential for increased adoption and innovation in the space. While there may be challenges and hurdles to overcome, the increasing use and acceptance of cryptocurrencies suggest that they will continue to play a significant role in the global economy.
