Given the prolonged global recession and a number of black swan events (Terra LUNA, 3AC, Celsius, BlockFi, and FTX) that encircled the cryptocurrency space in 2022, it was a difficult year for cryptocurrency traders, investors, and market participants. A lot of things transpired that have altered how we view cryptocurrencies, blockchain technology, and associated technologies in general. But what can we expect for 2023?
Will cryptocurrencies skyrocket, dump, or go sideways, leading investors go down an unexpected path? Will regulations be prioritized? Which cryptocurrencies will form a narrative to be more profitable in 2023? The answers to these questions which are of particular interest to crypto investors are going to be discussed in this article:
1. The start of the bull market
Please keep in mind that the macro bear market ushered on by the Federal Reserve raising interest rates to combat inflation is still something we must endure. Although the Fed has scaled back its rate hikes from 75 basis points to 50 basis points, it is anticipated that it will raise rates in 2023, just not as aggressively as it did in 2022. Additionally, it is probable that the Fed may limit rate increases to 25 basis points. The Fed might also cease hiking rates by the middle of 2023, which will free up the bulls.
Take note that a trend reversal will not be going to new all-time highs, but a rally from the oversold area as what several technical indicators are showing. Bitcoin is anticipated to increase, possibly reaching $30,000 to $40,000 and the trend movement to the upside will also be followed by altcoins. Due to the halving of Bitcoin, the crypto market may start to correct in Q3-Q4 of 2023 and then steadily start to rise in 2024.
2. Crypto regulations
Significant new cryptocurrency rules are expected to go into effect in 2023. Rules regarding stablecoins will be implemented very fast. This is due to the nature of stablecoins and how they affect the movement of the US dollar as well as the upcoming CBDCs of the US Digital Dollar. To ensure that stablecoins do not compete with CBDCs and as the cryptocurrency market grows, it does not become an uncontrollable giant that they are unable to manage, therefore governments are going to seek to regulate and restrict the use of stablecoins.
The ongoing dispute between Ripple and the SEC will also establish a new precedent for the cryptocurrency market, assuming that it is resolved on or before the 31st of March in 2023. It is also possible that the chair of the US Securities and Exchange Commission, Gary Gensler, will step down because of the failure to establish clear cryptocurrency regulations in the United States; however, this is not a guarantee. The Ripple lawsuit is essential in this regard, as it is helping to move crypto rules forward.
3. CBDCs will be introduced to the public
CBDCs will be a component of the new financial architecture as well as what some people are calling the “Great Reset.” This is due to the fact that every central bank in the world is focusing on this. The question of which blockchains these CBDCs will be created on will also be a fascinating development. It is likely to have a significant impact on the price of specific coins, depending on which ones are chosen to be used for CBDCs, because this lends legitimacy to the cryptocurrencies in question due to the fact that governments are utilizing them. Algorand, the XRP Ledger, and Ethereum are all potential candidates for use as currencies.
The actual risk of CBDCs is that if money is entirely electronic and is issued by the government, there is no upper limit to the amount of control that may be exercised over citizens. A CBDC would grant authorities complete control over the money entering and leaving each person’s account. Keep a close attention of the government in your country if they are maintaining rights to privacy as it is a key development that needs to be paid attention to.
4. NFTs will once again be the focus of media attention
NFTs are getting close to reaching their maturity stage and continue to gain adoption by major brands. This pattern will persist, and the general public will be further informed as a result. The purpose of NFTs will expand beyond mere artistic expression and become more practical. NFTs will eventually gain widespread adoption and have practical applications outside of the art world. It’s all about who owns the digital assets.
5. Artificial Intelligence (AI) crypto tokens will form a narrative in the next bull run
As the narrative surrounding artificial intelligence continues to build, such as with OpenAI and ChatGPT, AI-based cryptocurrencies will start to go on the rise, and they might do really well in the next bull market. There has been a recent uptick in the use of artificial intelligence (AI), and this bodes well for the success of cryptocurrencies and tokens that either make use of AI in some capacity or are based on AI-powered services. We witnessed the most recent bull market, which occurred during the summer of DeFi when DeFi tokens performed exceptionally well. There is a chance that it will actually occur for AI-based cryptocurrencies.
As we enter the year 2023, it is time to let go of the past and all the anguish and hurt it brought. You give the past power over you when you dwell on it, when you give it meaning, and when you allow it to be taken away from you. Prepare to enter 2023 by letting go of whatever that holds you back. Let’s move forward and give ourselves the liberty to use the talents and capabilities given to us to their fullest potential.
Rickie Sebastian Sanchez is an article writer specializing in cryptocurrency news. Since late 2017, he has been actively investing in cryptocurrencies. He is enthusiastic about everything that has to do with crypto and he hopes that the readers of his articles in the years to come will gain a massive understanding of blockchain technology.