There is no denying that the cryptocurrency market is experiencing difficulties. Initially on in the year, there was a fair amount of confidence, but at this point, investors are much more circumspect about where they invest their money.
This is true for institutional and ordinary investors alike, as both have been severely impacted by the crypto winter.
The cryptocurrency market is being driven in a new way by investors’ cautious approach to investing. Money is no longer just flung about carelessly like it used to.
The dot-com boom of 2000 is analogous to what the cryptocurrency market is going through right now, and 2023 will be a clear indication of that.
One of the most difficult years for the cryptocurrency industry has been 2022. To start. This year, Bitcoin and Ethereum lost about 64% (more than half) of their worth.
The demise of FTX was also seen in the cryptocurrency community. In November 2022, FTX was the topic of the town due to an $8 billion liquidity crisis and Binance falling out of the arrangement to buy the struggling exchange.
Although, this crypto winter is giving way to certain encouraging tendencies that may usher in a crypto spring.
It appears that 2023 will be a year of great change, and there are six significant trends that are currently dominating the market.
Will regulatory watchdogs enact new, strict legislation in response to FTX’s abrupt collapse? It’s time to highlight some potential cryptocurrency trends as we wave farewell to 2018 and welcome 2023.
More CBDCs to be launched
A report by CBDC Tracker in June, 2022 had revealed that 105 countries are looking into CBDCs. With 50 of them being in development, pilot and launch stage.
In the first week of January 2022, China, which is taking the lead, examined and introduced the pilot version of the digital Yuan. Currently, 23 large cities provide it, and the government plans to roll it out nationally in the upcoming year.
Using the e-CNY app, which is offered in the domestic market on the iOS and Google Play stores, you may purchase and sell digital Yuan.
We anticipate that the US Dollar, British Pound, and Euro will introduce their digital currencies in 2023. Africa isn’t left out of this adoption as Nigeria and Ghanahave launched as well.
Increased investment in stable assets, or stablecoins
Investors seek safety in reliable assets during erratic times. Stable assets, commonly referred to as stablecoins in the cryptocurrency field, are thought to be more stable than volatile cryptocurrencies like Bitcoin and Ethereum.
They are the perfect choice for those wishing to protect their money during volatile periods because of this characteristic.
DeFi is receiving more attention
You must have encountered the term “DeFi” more frequently than you anticipated as a crypto investor or researcher.
The term “Decentralized Finance,” or “DeFi,” refers to a different financial and investing environment that uses cryptocurrencies and blockchain technology.
The search trend for DeFi has increased by more than 5,600% since 2017 to demonstrate this idea. It is the foundation of cryptocurrencies and the primary driver behind their creation.
Decentralized finance is based on the premise that no one organization controls it and that all transactions take place in a public ledger.
DeFi employs “smart contracts” to enable transactions without the involvement of middlemen banks.
This is the polar antithesis of modern centralized finance, where transactions occur over secure ledgers under the total supervision of banks and financial organizations.
Ethereum effectively created the first cryptocurrency with the potential for smart contracts, giving it the first-mover benefit in the sector.
As of now, the Ethereum network is the most popular option for creating smart contracts. However, DeFi is still in its early stages, much like the early internet, when chat rooms and vibrant websites ruled the 1990s.
The entire promise of the internet, including digital payments and the development of remote labor, didn’t begin to manifest until the 2000s.
More meme coins will be developed
Dogecoin, a cryptocurrency that was first introduced in 2013 as a meme based on a Shiba Inu dog image that went popular, has come a long way to reach its current market valuation of $13.71 billion.
With more than 200 meme coins currently in use, this pattern is likely to persist in 2023. Tamadodge is the most recent meme cryptocurrency, and users can either earn it by playing games or buy it with fiat money to use for in-game transactions.
NFTs may not experience a comeback
In 2021, NFTs (Non-Fungible Tokens) were widely used. But in the highly unstable realm of cryptocurrency, things can change very fast.
The first and biggest market for digital collectibles and NFTs is called OpenSea. It experienced the biggest decline in monthly trade volume, from $4.86 billion in January 2022 to $303 million in October 2022, a staggering 94% decline.
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