10 Cryptocurrency Trends To Look Out For In 2023
There are currently more than 20,000 cryptocurrencies in existence.
Since Bitcoin’s launch in 2009, cryptocurrencies have exploded in popularity. Various cryptocurrency trends have affected the market and changed how the world of crypto works. If you’re interested in crypto, it’s essential to know what trends to look out for in the near future.
Keep reading for a rundown of 10 key cryptocurrency market trends for 2023.
1. Institutional Acceptance
Although many people worldwide have expressed negative opinions about crypto, it has continued to grow. We’re approaching a point where organizations, and even governments, are starting to accept cryptocurrencies.
This is leading to more mainstream adoption all over the world. Various retailers have started to accept Bitcoin and other cryptocurrencies as payment. You can also view here to see some of the Bitcoin ATMs that are available for use across the US.
With more institutional investors putting money into the crypto market, it is continuing to increase. This makes it easier for ordinary customers to purchase cryptocurrency and use it for various transactions.
Paypal has recently begun supporting crypto transactions, and other platforms like Venmo have expressed interest in doing the same. Some large companies like Tesla are allowing customers to buy their products with cryptocurrencies. As more organizations adopt crypto, the use among regular customers will continue to grow.
2. More DeFi Applications
Decentralized finance is one of the biggest things to come out of the crypto space, and it has drawn in many users. It’s based on the idea of traditional financial transactions within a blockchain. Unlike routine transfers, these use smart contracts and require no intermediaries.
This streamlined transaction process appeals to many people, and this sector will likely grow significantly throughout the next year. Farming has become very popular, whereby people can lend out digital assets and receive back coins or a certain percentage as a reward.
Farming this way tends to generate higher rewards than similar options with traditional finance. Decentralized exchanges (DEX) are also quickly becoming more popular. Platforms like Pancake Swap and DYDX are gaining more users and will likely continue to do so.
NFTs have been among the biggest crypto trends in recent years and will continue to follow this pattern in 2023. While the concept has been met with sizable resistance (possibly through a lack of understanding), many people and organizations have seen the benefits of the technology.
NFTs give people full ownership rights and can be traded with others through various blockchains. One of the most notable uses is within gaming, and this will only increase moving forward. Users can create and own specific digital assets within games and trade them with other players.
The Ethereum blockchain is the largest network that supports NFTs, but more and more blockchains are moving in this direction. Meta also recently announced plans for Instagram to start supporting NFT trading.
These are still early days for NFTs. The technology will likely continue to expand, and various new use cases will arise throughout 2023 and beyond.
One of the most significant concerns for many regarding the crypto space is a lack of regulations. As cryptocurrencies are decentralized, they’re not controlled by any financial institutions or governments. This is one of the significant appeals, but it presents a lot of risk to those within the space.
Various governments have banned crypto in their respective countries. Regulators are also beginning to look at the DeFi industry.
The introduction of more regulation will reduce the volatility of the crypto market. Huge sales have been known to cause issues relating to volatility, so this will help to alleviate this. It will also help combat criminal activities, which is currently one of the most significant issues in crypto.
Of the various Bitcoin trends affecting the market, this is one of the best to help generate trust amongst investors. People will feel safer about investing, encouraging more organizations to enter the space.
5. Expanding DApps Market
DApps (decentralized applications) are apps designed to operate using blockchain technology. There are already many of these on the Ethereum network, with almost all DApp financial transactions taking place on ETH applications.
There’s a range of developments taking place on the Ethereum blockchain, such as:
Various other blockchains are gaining more traction in this area. As different blockchains work in different ways, they’re attracting developers with needs that may not be met as well by Ethereum. Cosmos, for example, has incredibly fast transfer speeds, which is ideal for many DApps.
EOS is another network that is quickly gaining popularity. It has scaled significantly recently and offers high data transfer rates without transfer fees. It will likely continue to grow (along with others) in 2023.
6. New Generations Of Blockchain And Crypto
There are various generations of blockchain technology, and in 2023 we’ll see a lot more development of the third and fourth generations. An example is networks like Cardano, EOS, and Aion using sharding. Sharding results in faster transactions with reduced transaction fees.
Fourth-generation solutions like Argo and Insolar can hide complexities essential in blockchain technology, simplifying business networks.
Many of the advancements we’ll see in these generations are based around improving speed and scalability. This will make it easier to establish, reconfigure, and administrate enterprise networks. This will make blockchain technology more appealing on an institutional level and help organizations use various networks.
7. Greater Interoperability
One of the main challenges within blockchain technology has always been interoperability. Apps can be built on a specific blockchain, but they may have limitations based on that blockchain’s capabilities. Users who want to invest in different cryptocurrencies often have to have multiple wallets, and transferring between them takes a relatively advanced level of knowledge.
All of this creates a less enjoyable user experience. In all aspects of life, people value convenience, and that’s something that’s lacking in the crypto space. Many developers have looked for ways to help with this, which will be one of the most significant improvements moving forward.
Anything that makes it easier for people to buy cryptocurrency, transfer it, convert it, or spend it will be welcomed. There are currently some services available that are making the first steps toward a fully interconnected crypto world. Things will continue progressing over the next year and for a while.
8. Environmental Impact
Another primary concern related to crypto is the environmental impact. Bitcoin mining, for example, uses massive amounts of energy, and many people have spoken out about the harm it’s doing to the planet. As it stands, Bitcoin mining uses as much energy each year as the entire country of Argentina.
This is a genuine problem; as crypto becomes more popular, this could continue to grow into a much larger issue. One of the benefits of this is that it’s helping to advance sustainable energy sources.
Crypto miners do it to make money, and high energy bills are detrimental to that effort. As such, many have turned to renewable resources to power their mining rigs. This is putting more money into companies that provide renewable energy sources, helping them to grow and develop.
Despite this, it’s still a very prevalent issue. As such, several blockchains are gaining more popularity as they’re “greener” than significant blockchains like Bitcoin and Ethereum. These green blockchains will likely continue to have more success as people choose to support those that take the environmental impact into account.
9. The Disappearance of Meme Coins
Meme coins have made a sizable impact over the last few years. Coins like Dogecoin and Shiba Inu have seen colossal adoption, despite being developed somewhat as a joke.
Many smaller meme coins have popped up and then quickly disappeared. They generally don’t have much of a use case, so they don’t gain much support. Both DOGE and SHIB, however, are now among the most popular cryptocurrencies in the world.
It’s hard to say exactly what will happen with these moving forward. It’s unlikely that any other meme coins will have such success, but these two are now well-established. Many people think they’ll disappear soon, and it’s a genuine possibility as more people move into the crypto space.
10. Potential For Bitcoin To Outperform The S&P 500
In 2021, despite the Covid-19 pandemic, Bitcoin and the S&P 500 performed well and made sizable gains. Some suggest that the behavior of Bitcoin may be tied to the performance of the stock market.
The stock market may perform well through 2022, in which case Bitcoin is also likely to do the same. Conversely, if the stock market underperforms, Bitcoin will probably follow suit.
Following The Top Cryptocurrency Trends
The world of cryptocurrency is still very new, and changes come quickly. If you’re involved in it and want to get the most out of it, keeping up with the latest cryptocurrency trends is essential.
Investing and trading both take a good understanding of crypto if you want to do them right. When investing in cryptocurrencies or making trades, ensure you’ve done the necessary research to make well-informed decisions.
For more business articles, check out some of our other blog posts.