Some analysts predict further capitulation of the crypto market, while others think it might be the beginning of an early-year bull run. 2023 proves to be a critical year for the industry with much promise as much as doubt.
Right now Bitcoin is halving a great spell and has pushed past unexpected levels. Some online traders say the tomorrow’s CPI data could trigger another capitulation. But the truth is, nobody is Nostradmus. Today Chante from Crypto Lists takes a look at some of the foundations for a positive 2023.
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Performance of Major Cryptocurrencies
Following the particularly long stretch of the 2022 crypto winter and FTX’s downfall, the crypto market seems to be gaining momentum as seen in the performance of major currencies like Bitcoin (BTC) and Ether (ETH) in the past few days ushering in 2023. Bitcoin is the largest cryptocurrency by market cap, user base, and popularity. It has shown an improved short-term momentum pegging its price at slightly above $17,000 and maintaining a rather impressive resistance.
Several bullish investors are speculating about the trend to hold (HODLing [see our glossary]), particularly with the sentiment that the high volatility of Bitcoin doesn’t necessarily lower the intrinsic value of the digital asset compared to the mainstream market.
Ethereum has shown significant price surges in its liquid staking platforms, reportedly linked to the upcoming Shanghai upgrade scheduled to go live in March. The Ethereum Shanghai upgrade will allow staking withdrawals while reducing the staking risks. The downside to this event is that it might increase the selling pressure for long-term holders leading to a significant price drop in the digital coin. Cardano (ADA), Litecoin (LTC), and Solana (SOL), among several other altcoins, have all had bullish runs recently thus bringing hope of a potentially good start to the 2023 crypto market.
Solana’s Possible Recovery from FTX Association
The Solana network is perhaps Ethereum’s major competitor by offering its users more transactions per second and lower transaction fees. The exposure of Solana Labs and Solana Foundation to FTX and Alameda Research had seen its native token SOL drop by at least 30% in the wake of the FTX bankruptcy. However, the cryptocurrency network is currently experiencing increased transactional activities and its native coin gradually increasing in price from a low of $8.30.
The network further launched its version of a meme coin called the BONK coin to counter the effects of FTX and Alameda. 50% of $BONK was airdropped to users and recently, five million $BONK allocated to developers have been burned to counter its bearish momentum. There is increased adoption by the Solana community, but a majority of the crypto market is skeptical of its future.
The Solana ecosystem is not expected to fully recover anytime soon with many investors still shying away from the network. The whole saga has generated distrust and concern against digital currencies. It has impacted other currencies and promising projects relying on its ecosystem.
Blockchains are the foundation of cryptocurrencies, NFTs, Smart contracts, and other digital assets with the crypto community expecting the expansion of blockchain use cases in Q1 2023. More enterprises are integrating blockchain technology in supply chain tracking, trade finance, identity management, and ERP functions. Recent innovations in developer tooling, consensus protocols, and interoperability among networks will increase the functioning of these networks and boost the adoption of cryptocurrency globally.
Ethereum recently shifted to the Proof-of-Stake consensus, thus reducing its energy usage by more than 95%. The Ethereum network is highly popular for deploying smart contracts, NFTs, and decentralized applications (DApps). The move will attract more users to the network. The network is further developing a sharding mechanism for increased scalability, expanded data storage capacity, and reduced network fees. These projects are timely and warranty Ethereum’s success in the coming months.
Web 3 Development
Web 3 is the new age for the internet and is experiencing increased institutional adoption. There is unlimited potential in the metaverse. The incorporation of Artificial Intelligence and Virtual Reality in Web3 has unlocked a new world where users can enjoy exciting personalized experiences.
Expected features in the metaverses include the expansion of asset classes to include real-life assets such as real estate. Web3 has allowed sports and entertainment franchises to participate in the digital world by creating fan tokens and NFTs that can be used soon for ticketing, digital identification, subscriptions, and tokenizing real-world assets.
The recent and ongoing innovations and technological advancements in the digital currency world will highly boost the performance of the crypto market in 2023. New and existing players in the crypto market should expect the value of the digital assets to slowly rise and gain the required stability and market resistance in the first quarter of the year followed by a steady bullish run at the end of the third quarter till 2024. But, that’s just my opinion of course.
What do you think? 2023 up or down? Remember to do your own research and not invest anything you can’t afford to lose.
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