Will crypto soar, plummet, or tease investors in 2023?

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“Will regulation play a more significant role? Or will crypto skyrocket? And if so, which one?” 

New year, new investment opportunities. Cryptocurrencies are everywhere, just like predictions, assumptions, and aspirations. However, there is no better time to talk about them than the present. Assuming the past is any indication and looking at the future of cryptocurrency, investors are in for an exciting journey.

If you’re comparing crypto’s past performances and wondering what’s in store for digital coins to determine whether you should invest in some, this article might help you. 

Ether to outperform Bitcoin again

Ethereum outperformed Bitcoin, gaining 418% compared to 66% for Bitcoin. Some analysts are of the opinion that this altcoin will keep performing well owing to an increase in NFT sales volumes, as most of these tokens still operate on the Ethereum network.

However, as many specialists rushed to form false impressions last year, no one can tell exactly how the race will go, so make unbiased decisions when you’re putting money into an investment. To better understand its performance, check the Ethereum price on popular and widely-used platforms like Binance, and use common sense when buying. 

Meme coins to vanish 

A humorous image, video, or text spread rapidly by internet users is referred to as a “meme”. Meme coins are close to the dictionary definition of “meme” since they’re basically digital coins inspired by memes and internet jokes. Some offer little value, while others are outright scams.

Dogecoin is among the most popular meme coins, and it caused other developers to create more of them. Dogecoin spinoff Shiba Inu increased 44,540,00% last year. Moreover, a currency named Squid (after the TV show “Squid Game”) climbed more than 75,000% in less than a week before being gone for good. 

Some experts consider that meme coins’ time will be over this year as the hype around them fizzles and the market matures. Others believe some will boom, including Dogecoin, YooShi, Monacoin, and others. 

No one can tell where they are going, especially for how long they’ll stay. 

The Wild West to be regulated

Many compare cryptocurrency to the Wild West due to its lack of regulations, unpredictability, and volatility. For digital coins to make it into the mainstream, they must have a more positive reputation and fix the issues that are bringing about greater issues. To do so, they need to be regulated. 

However, it’s easier said than done, as virtual currencies were not created with this thought in mind. They’re decentralised, meaning they don’t involve a third party and are bank-free. And it’s a valuable characteristic as it minimises the corruption that fiat money involves, but it’s also crucial that the government preserves crypto’s qualities when creating a regulatory framework. 

You can see some progress regarding this aspect. The European Council approved the Markets in Crypto Assets (MiCA) law in 2022, and Ethereum will likely be granted greater regulatory clarity in 2023. With this clarity, Ether may become more widely accepted and used, creating opportunities for developers, investors, and a larger and more secure network. 

Although the initiative with Ethereum is still in its early phases, the advantages of a well-defined regulatory framework must be considered.

The first spot Bitcoin ETF to be approved 

Some cryptocurrency investors believe the first spot Bitcoin exchange-traded fund (ETF) in the United States may be authorised this year, giving investors direct exposure to the digital coins themselves. 

Last year, the Securities and Exchange Commission accepted the launch of ProShares’ Bitcoin Strategy ETF, although it only tracks Bitcoin futures contracts. Analysts think a Bitcoin Spot ETF will be approved since the market is now large and mature enough to sustain it.

More investors to adopt Bitcoin 

The founder of the Digital Assets Council of Financial Professionals, Ric Edelman, thought that more than half a million people worldwide would have Bitcoin in their investment portfolios by the end of 2022. According to Statist, exact figures aren’t available, but it seems like the global user base of all cryptocurrencies grew by 190% between 2018 and 2020. Bitcoin wallets differ by country; while Europe and America have many Bitcoin users, Africa and Asia are catching up. However, Bitcoin’s spreading in the latter two continents, too.  

The world to move toward decentralised finance (DeFi)

Some experts think that emerging crypto developments like DeFi and DAOs (decentralised autonomous organisations) will inspire other projects in 2023, and it’s no wonder why. Decentralised systems using cryptography and data protection through the blockchain are relatively immutable, which increases trust and security and allows for more personal control. DeFi is permissionless and transparent, so you have more control over your finance through it. 

DeFi tries to replicate classic financial products without the need for intermediaries, whereas DAOs may be seen as a new online community. Deposits into DeFi services surpassed $200 billion in 2021, with demand predicted to increase last year and possibly in the future, too.

According to CNBC, DeFi is part of a broader trend called Web3. Web3 supporters assert that online platforms are under the control of several companies like Apple, Amazon, and Facebook’s parent company Meta. Entrepreneurs like Elon Musk and Jack Dorsey, on the other hand, are sceptical. 

Web3 to be the next big thing 

Web3 can revolutionise how people think about data and the internet and decentralise and democratise data and the power that centralised organisations previously had. It uses blockchain to allow users to take back control of their data, meaning they can freely and securely store it, access it, and transfer it. Web3 can also make the internet more efficient and safer by reducing the danger of data breaches. 

Things being said, as the world opens up to tech advances, cryptocurrency can be more widely embraced. 

Summing up 

It’s impossible to predict cryptocurrency’s future; however, it is reasonable to assume that some digital coins will come back in 2023. Blockchain technology will likely see improvements, especially regarding scalability and transaction speeds. This might boost investor confidence, enabling the crypto market to regain momentum and reach new highs.  

For example, emerging new technologies like DeFi might catalyse Bitcoin’s recovery, making it a more attractive asset to traders and investors.