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5 Most Prominent Trends in Cryptocurrencies For 2023

The Cryptocurrency market has seen a roller coaster of volatility over the last year. Several experts have cast doubt on the long-term viability of Cryptocurrencies amid widespread fraud and plunging prices. Despite this, the total value of the Crypto sector continues to exceed $1.05 trillion. In addition, there are around 320 million Bitcoin users worldwide. This study will highlight the most significant developments in the Cryptocurrency industry so far in 2023. Plus, these Cryptocurrencies are expected to last at least until 2024.

Regulatory organizations throughout the globe, among them the US SEC, are adopting a hawkish attitude towards Crypto, foreshadowing tighter regulation for the sector and a curbing of the digital currencies called the “wild west.” Whenever the markets get under stress both from bulls and bears, as it would be in 2023, we shall examine the five most important elements which would affect the Cryptocurrency realm.

Here are the 5 most prominent trends you should know and analyze for 2023 in the Cryptocurrency space:

1. The Bear Market Has Settled In

In early 2023, the Cryptocurrency market is definitely in a bear market, as asset values have fallen significantly and investors have fled the sector. It has been called “Cryptocurrency Winter” by some. Multiple times in the last 50 years, the market has seen a bear market that lasted for more than 20 months and caused losses of over 70%. The breakdown of the Terra environment, FTX, large-scale user transfers, as well as widespread fear and uncertainty have all contributed to the ongoing bearish trend, which has lasted for 350 days and counting. The market value has dropped to levels in recent days that are 65% lower than its 2021 highs. Yet hopeful developments are on the horizon. The midway point of January saw Bitcoin trading just 10% below its 200-day moving average. Some market watchers believe the bear market has ended after prices have risen over the 200-day moving average.

2. The FED May Raise Rates Again in 2023

Because of its risk-on character, the Cryptocurrency market tends to magnify movements in the stock market, since the two have been more connected in recent times. Throughout the course of 2022, the Crypto community paid careful attention to the Federal Reserve’s (FED’s) decisions. The latest numbers show that inflation in the US has been declining. After peaking at 9% in June 2022, inflation had fallen to 6.5% by December 2022. The FED, meanwhile, believes that this decline is insufficient and therefore is working to restore inflation towards its goal rate of 2%.

3. Increasing NFT Use Cases

Another development that Cryptocurrency specialists predict will emerge is the return of NFTs. An NFT exchanged hands for $69,000,000 in March of 2021. At the end of 2022, in the month of November, the market had dropped by 97%. Reasons for this include the prolonged Bitcoin downturn, rising prices, the pervasiveness of frauds, as well as consumers’ general mistrust of items that use blockchain technology. Several, nevertheless, are optimistic that NFTs may bounce back. According to the CEO of Outlier Ventures, this market will be among the first to rebound in the Crypto space in 2023. In addition, the NFT industry is expected to be worth $231 billion by 2030, according to a survey by Verified Market Research. NFTs haven’t lost much traction in the gaming industry. Virtual vouchers connected to NFTs are used by players to acquire and exchange virtual items. When it comes to NFTs and the Web3, ImmutableX is among the most well-known game developers that has gone all in.

4. Bitcoin Markets May Be Disrupted by Ethereum’s Shanghai Hard Fork

Since the beginning of 2023, the price of Ethereum has increased by about 30%. The better financial situation certainly had a role, but the Shanghai Hard Fork scheduled for March was also crucial. Forks of Ethereum, which are essentially major updates to the blockchain, have traditionally been given the names of ancient as well as contemporary towns. When it happens in September 2022, the Shanghai Hard Fork will be the most significant improvement to Ethereum since The Merge. The Ethereum Improvement Proposal (EIP) 4895 will be implemented in the Shanghai update. To put it simply, this facilitates the withdrawal of staked ETH, which, at over US$26 billion in market value, is the largest staked Cryptocurrency.

5. Consequences of the FTX Crash Continue

FTX was among the biggest Cryptocurrency exchanges worldwide in mid-2021 when its market cap reached $32 billion. Nevertheless, information of an accused Ponzi scheme as well as billions in losses revealed after the firm filed for bankruptcy in November 2022 and the founder was arrested in December 2022. Over $600 million in FTX founder Sam Bankman-assets Fried’s were confiscated by the U.S. authorities in January 2023. Lenders of FTX are in the millions, and their $8 billion in unpaid loans is a topic of great interest. Despite the fact that the United States government has put up a website to aid in the procedure, insolvency specialists have cautioned that it could take several years, and also that lenders are doubtful to recoup their full investment. FTX’s demise has brought attention to cold wallets, an offsite method of storing Bitcoin.