Crypto Market in 2023

As we segue into the new year, it's time to address primary narratives for 2023: big sectors of crypto space to watch out for and see where we're headed and what to expect. Here are six trends supposedly dominating the crypto market this year, according to the Arctic Wallet team.

The Wave of Decentralization

Since the FTX collapse, crypto holders got a massive reminder to gain more control over their crypto, which resulted in increased trading levels inside decentralized exchanges. In this context, DeFi platforms and DEXs could meet heightened demand.

As for institutional adoption of blockchain, the year 2022 has seen the sparking interest of JP Morgan, Goldman Sachs, and other banking corporations in combining traditional finance with DeFi elements. Another example is PayPal integration into MetaMask wallet to bridge the gap between crypto and fiat.

Looking further, VanEck predicts the trend of decentralized stablecoins offerings. These stablecoins will rely on over-collateralization and community governance to maintain price stability rather than fiat funds. The decentralized crypto wallet sector is also anticipated to grow significantly.

Ethereum Layer-2 on the Rise

With the escalating rates of institutional adoption of blockchain, Ethereum-based networks, including Polygon, Arbitrum, and Optimism, appear to be of primary choice for partnerships due to their scalability. More recent examples are Polygon x Reddit & Visa x StarkNet collaborations.

Shanghai Upgrade to Ethereum planned for March this year will speed up the whole ETH ecosystem even more, considerably expanding the L2 blockchain utility.

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Web3.0 Gaming & NFT

The year 2022 brought an unprecedented $7 billion investment in blockchain gaming and metaverse projects despite the bear market. Web3 gaming will still be a thing in 2023, especially concerning DeFi and traditional gaming integration. Tech giants like Microsoft and Epic Games showing great interest in the sphere is only the beginning.

Considering NFTs are an immutable part of crypto gaming, non-fungible tokens are not likely to fade into view, especially since NFTs find more real-world use cases. One striking example is the renowned record label Warner Music Group preparing to launch an NFT music streaming platform in collaboration with Polygon.

AI & Machine Learning in crypto

Artificial Intelligence has been another spot of interest since Q4 2022, with the GPT chatbot all over the news. While the application of AI is widely explored in many industries, the crypto sphere has a lot to gain from the technology.

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The manifold of possible AI use cases in the crypto sector include resolving security issues, improving crypto market analysis, assisting with investment, and expanding the metaverse among others. Undoubtedly, a lot to research.

Bitcoin Recovery 2023

Prepping for Bitcoin Halving 2024

Historically 12 months prior to the Bitcoin halving event, the BTC price started to trend up, which so far happened leading up to every bitcoin halving in history.

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Image Source: Investopedia

Yet, it's still not safe to say whether the pattern will work out in the same manner as the crypto winter we exist in is pretty much unprecedented.

Bitcoin price predictions 2023

BTC price predictions by various analytical platforms traditionally share contrasting prognoses. Business2community analytics stick to a bullish scenario for 2023, speculating the coin price may grow up to $75k provided inflation rates soften anytime soon.

However, the majority of analytics suppose there will be another dip for Bitcoin. Specifically, Cryptopolitan analytics forecast BTC may drop back down to $16,000 per coin before stabilizing at $39,000. The most bearish scenario, for now, is a 50% decline from today's price resulting in a $10k year-end BTC price.

Land of Regulation

The FTX saga sped up institutional involvement in regulating the crypto sphere. Hence, more clarity and regulations are expected in 2023.

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Image Source: Visual Capitalist

Amidst the depressed macroeconomic picture, governments are considering CBDC and crypto adoption to settle cross-border payments and discover new opportunities. The U.S. Federal Reserve working on central bank digital currencies and Brazil's comprehensive regulatory framework are few examples signalizing a wider trend for cryptocurrency adoption.

Will crypto go back up in 2023?

It's almost impossible to predict the future of crypto in the next five years or even a year. The cryptocurrency market always recovers as it moves in circles. The question is when. Hands down, the entirety of 2023 will be of big opportunities and more innovations. As well as lots of volatility and turbulence. Building your own open-minded perspective of things considering all the risks is of primary importance here.

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