2023 Crypto Trends Wrapped – What Does the Future Hold for Digital Coins?

The crypto market went through a challenging time in 2022, and by the end of November, it registered a decline of over 70% from the peak it experienced in November 2021. The market spiralled down when the FTX market dipped. A negative sentiment surrounds the crypto sector these days, and even crypto enthusiasts cannot help but wonder if the market could fall any lower in 2023.

Crypto specialists think the drop in value exposes the projects that failed to create proper protocols. All the other financial markets have experienced similar periods. Still, the assets that can demonstrate proof of transparency and provide evidence that user investments are safeguarded will overcome the present challenges.

The failure of a third party, like the FTX, highlights the advantages cryptocurrencies offer. Progress isn’t on the mind of investors witnessing the collapse of a sector, but experts believe that once the dust settles, new projects will come to light, and old ones will establish their status on the market. The last bull market facilitated the rise of non-fungible tokens and DeFi. Nevertheless, their use cases only scratched the surface because crypto enthusiasts hadn’t figured out how to take advantage of these digital assets. The underlying technology can be used in sectors like gaming and ticketing systems, so crypto specialists expect to witness a wide-scale adoption.

The more people will start using blockchains like Bitcoin and Ethereum for the purposes they were created, the higher their values will spike. Cross-border payments should register a significant rise in popularity, specifically using Bitcoin’s ecosystem, which can transform crypto into a fast and low-cost global payment network.

The Bitcoin/Stock market correlation will get stronger

The present macro conditions are challenging for all financial markets. Elon Musk recently stated, “Macro conditions are difficult: energy in Europe, real estate in China & crazy Fed rates in USA”, summarising the situation better than anyone could do it.

Because Bitcoin and the stock market have been correlated over the last few years if stock prices rise in 2023, so will Bitcoin price. Experts believe that the correlation between the two can be interpreted as a bullish indicator for the cryptocurrency, but it all depends on how equities will move in the following months.

Stablecoins will take the lead

Stablecoins are altcoins developed to alleviate the volatility of cryptocurrencies prices. Their value is pegged to a stable asset like fiat money or exchange-traded commodities. In the current market context, stablecoins are considered the best cryptocurrencies to have in your wallet, however, because their prices don’t fluctuate, so they’re not viewed as investment opportunities.

Two reasons will support the growth of stablecoins in 2023

– The instability of non-centralised tokens

– The dethroning of Tether, the present leader in the stablecoins sector

Tether is the most well-known stablecoin in the sector, as it was one of the earliest altcoins to enter the market. But the industry has evolved over the years, and Tether failed to keep up. Now that investors have started to recognise stablecoins values, Tether’s dominance might come to an end because crypto enthusiasts will be looking for stablecoins that provide them with an extensive list of benefits.

Layer 0

Layer 0 is one of the most attractive areas for developers and investors. Layer 0 solutions aim to make the blockchain an environment that supports the construction and interoperability of networks with particular features without the need for a centralising protocol. Layer 0 makes blockchain activities secure while providing users with a seamless experience due to smart contracts. People who use other networks to communicate or complete transactions pay several fees, and their profit drops.

Even if the crypto market registered a negative evolution in 2022, resources through the blockchain remain in high demand, and therefore, Layer 0 solutions are expected to grow in popularity.

Benefits of Layer 0

– It enhances the characteristics of Layer 1 and Layer 2

– It boosts security

– It eliminates the need for an intermediary

– It lowers costs

The number of decentralised exchange platforms will grow

Another cryptocurrency trend expected to gain popularity in 2023 is new decentralised exchange platforms that facilitate the transaction of virtual money. Most of them make it easier for users to buy and sell digital currencies. As Web3 comes more into the mainstream, crypto enthusiasts expect decentralised exchange platforms to attract more enthusiasts. At present, most digital currency transactions require a third-party facilitator, but the emergence of decentralised platforms will remove this dependency.

Advanced cryptography

Blockchain technology relies on cryptography to encrypt communication between nodes and facilitate immutable and verifiable transactions. Blockchain developers use symmetric and asymmetric cryptographic algorithms because they offer keys for the communicating nodes and use private and public keys to encrypt and decrypt messages.

Besides the symmetric and asymmetric techniques, developers could also use multi-signature algorithms to create digital signatures when multiple parties are involved or the zero-knowledge proof that enables proof of knowledge without sharing data across the blockchain. The last two methods allow blockchain developers to boost transaction and user privacy while maintaining security.

Blockchain as a service

Cloud-based services are flexible and affordable and promote the service business model for blockchains. Blockchain developers can take advantage of the technology to create and host apps and smart contracts in the system, cutting down the time-to-market. Organisations can also use blockchain as a service because it allows them to save on the expenses associated with hiring in-house developers. When taking advantage of the several benefits of the blockchain, companies can focus on improving services and optimising their offers to improve their efficiency and make the network agile.

DeFi

The bankruptcy of FTX might gain more space for decentralised finance. Even if many people still have to figure out how the environment works, they may prefer to educate themselves and venture in a sector that promises to offer security and the chance for revenue. Decentralised finance uses smart contracts, and all transactions are recorded on the blockchain. DeFi brings benefits like:

– Easy access to tokenization

– Transparency

– Immutability

– Permissionless