2023 Might Be The Year For Digital Currencies – Here Are The Experts’ Predictions

The crypto sector has always been versatile, but it has been highly unstable since 2022, and investors don’t know what to expect from it.

All cryptocurrencies, including Bitcoin and Ethereum, registered drops in value, losing over 60% of their financial worth.

And let’s not forget about the collapse of the crypto exchange FTX, which happened due to an $8 billion liquidity shortage.

The event caused a lot of buzz around the crypto sector, and many have started to wonder what is the best way to buy Bitcoin and other cryptocurrencies.

Experts agree that exchange platforms continue to be one of the most reliable solutions to purchase and trade digital currencies because they also offer information about price evolution. 

Suppose you are interested in the crypto sector, you should find out what the future holds for the sector in the following months.

Governments Are Expected To Introduce Centralized Cryptocurrencies

Should anyone be surprised that governments worldwide consider the option of developing their cryptocurrencies to take advantage of the multiple benefits blockchain offers?

The Bahamas set the trend in 2020 when it became the first country to create a digital currency called the Sand Dollar, which is the digital version of the Bahamian Dollar. Other governments follow its example and look for ways to create digital currencies.

China has launched a pilot version of a cryptocurrency that will serve as a replacement for the Yuan in 2022.

At the moment, the digital Yuan is available in only 23 cities, but the government intends to release it to the entire nation. 

Crypto specialists expect other governments to launch digital currencies in the next period because blockchain technology offers several advantages. 

The Crypto Market Will Feel The Consequences Of The Ftx Collapse Even In 2023

We mentioned earlier that the FTX collapse was one of the events that drove attention toward the crypto sector.

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As expected, it will have a long-term effect on the market because it has shaken the public’s trust in digital assets and services.

The collapse of one of the largest crypto exchanges in the industry shattered the credibility of digital assets and caused a drop in interest among financial players, institutions, and investors.

It has also highlighted the risks associated with the crypto scene, which could hinder the industry’s progress in the future. 

The period immediately succeeding the FTX collapse has caused a drop in market capitalization, and other crypto projects and exchange platforms have also felt the risk of liquidity issues looming over their existence.

The unfortunate event could only make crypto investors expect a volatile and challenging 2023 when investors think twice before adding a new project to their portfolios.

This could also slow down the growth of NFT and De-Fi markets, as they’re connected directly with the performance of exchange platforms. 

The Sector Will Be Subjected To Stricter Regulations

In the following months, the crypto sector is expected to develop precise regulations around digital assets.

The process has already started as lawmakers worldwide are creating guidelines and regulations that aim to make digital currencies safer for investors. 

The latest events in the crypto sector have also emphasized the idea that stricter regulations are essential in the crypto sector to prevent similar circumstances to the FTX collapse.

Regulatory organizations are working on creating a set of regulations that could limit the volatility of the highly unregulated crypto industry. 

The FTX collapse has brought the dangers and risks of an unregulated market front page.

Considering that the crypto sector cannot regulate itself, it’s clear that authorities have to assume the role of developing regulatory frameworks and strictly supervising its performance.

In the following months, regulators will put in the effort to create a set of rules that lower the risks and challenges investors face when approaching the crypto market. 

De-Fi Will Receive More Attention

Everyone in touch with the crypto sector has come across the word De-Fi. However, only a few fully understand what this innovative technology is.

De-Fi stands for decentralized finance, an alternative to traditional finance that relies on blockchain and cryptocurrencies. 

De-Fi is the main reason digital currencies have been created, to offer people access to a decentralized system with no entity controls where all transactions are performed with the help of a public ledger.

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De-Fi uses smart contracts to enable transactions and remove the need for an intermediary from the process. This is a great alternative to the traditional centralized finance system, where banks and financial institutions fully control transactions. 

Ethereum is the blockchain that first introduced the concept of smart contracts in the market and has made it possible to move value without the involvement of a third party. Even nowadays, Ethereum is the preferred platform for creating smart contracts. 

However, De-Fi is still in its early phases, and improvement is highly required. 2023 could bring new upgrades for the technology and boost its utility and functionality. 

Meme Cryptocurrencies Continue To Be Popular

Even if meme coins don’t reach the value heights other altcoins do, they continue to be popular. Dogecoin, one of the most well-known meme coins, was created in 2013 and has gained a market capitalization of $13,71 billion at this point.

At present, there are over 200 meme coins in circulation, and experts predict that the trend will continue in 2023. 

The cryptocurrency sector is so exciting because it propels innovative projects out of anonymity and allows investors to make a profit in the most surprising ways. 

Specialists Doubt That NFTs Will Survive In The Long Run

While meme coins will remain popular in investors’ portfolios, NFTs might not be so lucky.

Opensea, the largest marketplace for non-fungible tokens and collectibles suffered a decrease in monthly trading volume.

Some people think 2023 will bring the end of digital collectibles. However, the market has always been volatile, so the drop might be only one of the phases the sector goes through regularly. 

The Takeaway

The crypto industry will have an exciting year ahead, and we’re looking forward to seeing which of the above trends become a reality. 

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Jonathon Spire

Jonathon Spire

Tech Blogger at Jonathon Spire

My diverse background started with my computer science degree, and later progressed to building laptops and accessories. And now, for the last 7 years, I have been a social media marketing specialist and business growth consultant.

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Jonathon Spire

I blog about a range of tech topics.

For the last 7 years I have been a social media marketing specialist and business growth consultant, so I write about those the most.

Full transparency: I do review a lot of services and I try to do it as objectively as possible; I give honest feedback and only promote services I believe truly work (for which I may or may not receive a commission) – if you are a service owner and you think I have made a mistake then please let me know in the comments section.

– Jon