Top Crypto Predictions to Watch Out For in 2023
Will cryptocurrency soar, plummet, or tease investors along an
unpredictable path for the foreseeable future? Will Bitcoin continue its volatility? Will regulation play a more
significant role? Which type of cryptocurrency will be the best bet this coming
year?
There are as many predictions as there are
analysts charting the future of cryptocurrency.
Crypto continued its popularity in 2021.
Crypto became accepted by Goldman Sachs. Coinbase debuted in April 2021 (the
first major crypto company to go public), and the first U.S. exchange-traded
fund linked to Bitcoin launched in October.
According to CNBC, the best-known cryptocurrency, Bitcoin, had a good
year. The digital currency has been up nearly 70 percent since the start of
2021, driving the entire crypto market to a combined $2 trillion in value.
Looking at the future of cryptocurrency, if
the past is any indication, investors in cryptocurrency are in for an exciting
ride. Some interesting crypto predictions to watch out for in 2022 include:
Heading for a Crypto Crash or an Exciting Climb?
Cryptocurrency prices could fall further in
2022. They leaped to a record high of almost $69,000 in November, but they are
now below $50,000, down nearly 30 percent from its high. Carol Alexander,
a Sussex University professor of finance, expects Bitcoin to plummet to a low
of $10,000 in 2022, which would erase most of its gains in the past year and a
half.
Others don’t see a crash in 2022. Yuya
Hasegawa, a crypto market analyst at Japanese digital asset exchange Bitbank,
believes the most significant risk factor is [quantitative tapering] by the
Fed. He thinks it has been decided and is probably priced in.
Sayantani Sanyal reported that many factors
point to higher Bitcoin prices, namely greater acceptance by businesses in higher
demand from Bitcoin ETFs. In Analytics
Insight,syndayl says that market
analysts predict that Bitcoin could hit USD $100,000 by the end of 2023, and
others say it can climb to the mark in the first quarter of 2022. Others write
that Bitcoin won’t reach more than USD $70,000 by the end of 2022.
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The First Spot Bitcoin ETF Could Get
Approved 
Some crypto investors
predict that the first spot Bitcoin exchange-traded fund (ETF) in the United
States could be approved this year, giving investors direct exposure to the
cryptocurrency itself. The Securities and Exchange Commission allowed the launch
of ProShares’ Bitcoin
Strategy ETF last year, but that
just tracks Bitcoin futures contracts. However, because the market is now large
and mature enough to support it, analysts believe a Bitcoin Spot ETF will be
approved.
Moving Toward Decentralized Finance
Emerging crypto developments such as
decentralized finance (DeFi) and decentralized autonomous organizations
(DAOs) are “likely to be the highest growth areas of crypto,” believes
Bryan Gross, network steward at crypto platform ICHI. DeFi aims to recreate
traditional financial products without middlemen, while DAOs could be
considered a new internet community. Deposits into DeFi services surpassed $200
billion in 2021, and demand is expected to grow in 2022.
Carol Alexander said that investors looking
to make gains in smaller areas of crypto will want to watch Ethereum, Solana,
Polkadot, and Cardano coins in 2022.
CNBC reported that DeFi is part of a broader trend called
Web3. Supporters of Web3 assert that online platforms are under the control of
a few companies, such as Amazon, Apple, Alphabet, and Facebook’s parent company
Meta. Web3 calls for a new, decentralized iteration of the internet
incorporating blockchain and non fungible tokens. However, entrepreneurs such
as Elon Musk and Jack Dorsey remain skeptical.
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Bitcoin
Will either Outperform or Underperform the S and P 500
Arcane Research said that Bitcoin has
performed like a risk-on asset, and they predict it will amplify the behavior
of the stock market. If the stock market increases in 2022, Bitcoin will likely
outperform, the firm said. But if the stock market has a red year, Bitcoin will
likely underperform.
Most meme coins will disappear
Last year, a Dogecoin spinoff Shiba Inu climbed 44,540,000 percent. Squid, a coin named for the television drama “Squid Game,” jumped more than 75,000 percent in less than a week — only to disappear soon after
Past Performance of the Crypto Market Suggests 2023 Will Be a Good Year
The crypto market has been on a roller
coaster in the past few years, with prices rising and falling quickly. Despite
the volatility, however, it is undeniable that the crypto industry has shown
tremendous growth in the past few years. Industry professionals are optimistic
that this trend will continue into 2023, as past performance of crypto markets
suggests that this will be a good year for virtual currencies. This bodes well
for investors who have already been involved in the crypto markets and those who
are just getting started.
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