Undoubtedly, 2022 was one of the most heated and challenging years for the cryptocurrency market. You have witnessed failures such as:
- the drop in value by more than half of projects like Bitcoin and Ethereum;
- the collapse of an exchange like FTX due to poor management of the exchange, resulting in billions in debt;
- the unprecedented situation in which a billionaire, Sam Bankman-Fried of course, ceased to be a billionaire in just 24 hours;
- the destruction of over $50 billion in the Terra Luna crash, and other unfortunate events.
But even despite all the cataclysms, which happens with the crypto market in 2022 – the market analysis says that it will get stronger and rise from its knees, but it is doubtful that this will happen in 2023.
In order not to lose your investments and make successful investments – let’s look at cryptocurrency market trends in 2023.
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The Introduction of Cryptocurrency As a State Unit of Currency
To date, history already knows states that dared to make one of their currencies – cryptocurrency, for example, such as:
- The Bahamas, which back in 2020 introduced a “sand dollar” on its territory, which was a digital version of its national currency;
- China was not immune to this digital evolution and introduced a digital interpretation of the yuan. Initially, this cryptocurrency was introduced in the country’s metropolitan areas. Such reform has fully justified itself, and in the future, citizens of all of China will be able to become its users. The use of digital currency has become very convenient for the population due to its accessibility because it is possible to carry out operations of purchase and sale of currency through applications, which in stores iOS and Google Play;
- By the way, the very first country to start working on a digital currency unit was the United Kingdom, which implemented this project to meet the needs of public policy.
To date, there is reason to believe that the world’s leading currencies (euro, U.S. dollar) will also be available in digital form.
Increasing Number of Investments in Stablecoins
Of course, 2022 was a year filled with unpredictable cataclysms in the cryptocurrency world, and there was an occasional feeling that the collapse was near. As a result, there is now a trend of increased investor interest in Stablecoins, which, unlike volatile cryptocurrencies, are a more secure investment and minimize potential risks.
Increased Attention to DeFi
These are applications and services that are built on blockchain that aim to accomplish the following tasks:
- to replace the banking system and technology of the standard government financial system with decentralized finance;
- from the first point comes the possibility for investors to use investment platforms and decentralized lending, which in turn gives from cryptocurrency assets – passive income.
Increase in the Number of Meme Coins
In 2013, the newly created Dogecoin, which was visualized by a coin with the image of a dog, made a splash. For many years, the market capitalization of this currency has already accustomed 13 billion dollars. According to the market analysis, this growth trend will continue in 2023.
Also, today deserves your attention and the last-issued coin Tamadodge. The designated project stood out due to its game form and attracted not only classic investors but also fans of computer games. Play and earn – an interesting concept.
NFT May Have Exhausted Itself
Just a couple of years ago, NFTs were in great demand and implemented on the platform of the Opensea market, which recorded an incredible drop in trading volume during the month, and it was more than 90%.
The basic idea behind decentralized finance is the following, viz:
- transactions are not controlled by third parties;
- transactions are shown in a ledger, access to which is not restricted;
- in order to carry out transactions without intermediaries in the form of banking institutions, so-called “smart contracts” are used.
In essence, you conduct your usual banking transactions in the internet space, but they are not subject to control by the government or banking institutions.
Ethereum was the first to create a currency through which a smart contract could be made. And, of course, they became the leaders in such activities.
According to the situation in the cryptocurrency market, today it is impossible to say unequivocally whether NFT will be able to recover after such a catastrophic collapse. Most likely, the year 2023 will be decisive in the issue of its existence.
Creating a Legal and Regulatory Framework for Cryptocurrency Regulation
International institutions such as the G7, G20, BIS, World Bank, and others say that they are ready to cooperate in a coordinated way to create a legal and regulatory framework for cryptocurrency regulation. The current laws are ineffective and, to be blunt, ineffective in addressing the abuses that exist.
History already knows a large number of legal proceedings related to cryptocurrency. One such sensational situation was when a case was brought against Ripple Labs. The SEC found out that the coins had already been sold when they were offered assets worth more than a million dollars for the purchase.
In the article, you were introduced to the trends of 2023. Cryptocurrency will exist, even though there is a significant collapse, which is argued by both the economic and political world situation.
Keep an eye on blockchain and cryptocurrency developments in order to maximize the benefits of your investments, as well as reduce spending and optimize your operations.