What awaits the cryptocurrency market in 2023?

2022 turned out to be, to put it mildly, a difficult year for crypto enthusiasts. The fall in the rate of cryptocurrencies, difficulties with mining, the collapse of Terra, FTX and other projects in the crypto industry have cast doubt on the prospects of the industry. Oil was added to the fire by state regulators, which created additional threats to the cryptosphere.

In this article, we will outline the main trends that may well await us in the new 2023.

The fall of the main cryptocurrency of the world has been going on since November 2021. From ATH (the highest price mark ever) at $67.5K, BTC has dropped several times in value and Bitcoin is now trading just below $17K.



And this is not the limit: the most disappointing cryptocurrency of 2022 has not yet reached the bottom. Many analysts share the same opinion, but give different marks to which its value will fall. In our opinion, there is still the potential for Bitcoin to weaken to $10,000.

Okay, when can we expect a reversal? Analysts give a conflicting forecast for the cryptocurrency. For example, back in November, experts from Coinbase noted that the collapse of FTX would extend the crypto winter for at least a few more months, and maybe until the end of 2023.

To this it should be added that investors continue to withdraw funds from cryptocurrency assets. It is enough to refer to the graph of the total market capitalization of cryptocurrencies, which demonstrates the frustration of holders in the cryptosphere.

Analysts from the FXStreet portal have a different opinion. They also believe that BTC's decline will continue, but at the same time point to an emerging bullish mood. Among the many tools that predict an uptrend, pay attention to the number of investors who hold from 100 to 10 thousand coins: it has increased by 327 new addresses. So what, you ask? The trick is that in February of this year, an increase in the number of addresses by 274 led to the strengthening of BTC by 10 thousand dollars. And the 373 new addresses from September to November last year coincided with a $26,000 increase in the price of bitcoin. Have you forgotten when the BTC price peaked?

After the recent “Merge” (“The Merge”), when Ethereum switched to the Proof-of-Stake algorithm, many people started talking about the good prospects for the coin in the new year. And there is a reasonable explanation for this.

This year, large states have encroached on mining, preparing for the introduction of legislative restrictions (in the EU and Russia) or having already implemented bans (in the state of New York). They are associated with the negative impact of mining on the environment, and the environment is now considered one of the priority areas in developed countries. Add to this the high electricity costs and low income from the Proof-of-Work algorithm - and we get a crisis of miners.

Ethereum 2.0 updates (“Merge” - one of the stages) will make the coin attractive for investment. Although altcoins, including ETH, used to follow the movements of Bitcoin, now Ethereum can go free-floating.

The collapse of FTX has led investors to flee high volatility markets. As noted by Coinbase, some crypto enthusiasts have switched to stablecoins to protect their assets. As a result, the percentage of dominance of "stable coins" in the market has increased.

However, this strengthening only continued the trend of recent months. While the level of BTC dominance was falling, stablecoins gradually became more popular.

So far, USDT remains the largest stablecoin - but, apparently, not for long. Scandals, litigation and the USDT's dubious reputation do not play into his hands. USDC, the second stablecoin by market capitalization, has established itself as a reliable asset with transparent reporting and is quite capable of taking the gold medal from a competitor.

Finally, the collapse of FTX helped popularize the DeFi sector. Centralized exchanges turned out to be unreliable in the eyes of their clients, so many began to transfer funds to decentralized sites. It looks like this trend will continue next year.