The active introduction of information technology has transformed the traditional financial market. Accelerated globalization and digitalization of various spheres of human life have initiated the development of new interesting innovations in the field of financial systems, payment aggregators, and various Internet technologies. Among others, blockchain technology is one of the most intriguing and promising trends, which is believed to revolutionize the idea of money in the near future.
The emergence and popularization of cryptocurrencies have generated several disputes in academic circles about the possibilities of market development, the further use of virtual money, and the peculiarities of their integration into the traditional financial system. However, every day the crypto market is getting bigger, developing with incredible speed and giving life to new crypto trends that fundamentally change our lives.
This article will shed light on what the crypto market looks like today and the conditions necessary for it to develop in the future. Ultimately, we’ll look at the top 5 most promising crypto trends to watch out for in 2023.
The total capitalization of the cryptocurrency market in the second quarter of 2022 decreased by 58.1%. Bitcoin hit its worst performance in more than a 10-year period, with June being the worst month in its history. Bitcoin was down nearly 70% from its ATH on November 10, 2021. What’s more, at points, it fell below $16,000 — that is, below the ATH of the previous cycle. It happened for the first time, and the reasons for that were the 2 biggest market crashes this year, one of which is related to the fiasco of once-promising crypto project Terra Luna and the other to the sudden collapse of one of the largest crypto exchanges in the world, FTX.
However, Bitcoin’s problems are less significant than those of Ethereum. Ethereum is under pressure right now because of the situation in the DeFi sector. Problems with staking and lending platforms could jeopardize its entire liquidity. ETH is one of the biggest assets in such protocols, which means all of Ethereum will be liquidated if the sell-off continues or if the DeFi protocols encounter other problems. The result is obvious: major cryptocurrencies could plummet, and the rest of the market would fall with them. Only a few cryptocurrencies (excluding stablecoins) rose in the second quarter. Many altcoins almost zeroed out, and they will need huge gains (thousands of percent) to reach ATH again.
However, such sad data does not mean that this is the end. Crypto is now more correlated than ever with traditional financial markets, so rising inflation and other factors are taking a toll on all assets. Despite all the problems, the world continues actively adopting crypto, and many countries are preparing regulations. This trend will continue.
As a result of its official status as a payment method, Bitcoin was first recognized as such in El Salvador. Cryptocurrencies are expected to be recognized by several more states by the end of 2022. The countries likely to be selected are Brazil, Argentina, Kenya, Lebanon, and the Philippines. As a matter of law, companies that provide digital asset transactions operate in a gray area in the United States. Cryptocurrency regulations will be approved in the near future, allowing blockchain projects to be integrated into the financial system, according to experts.
The new technology is expected to fundamentally change the approach to the interaction between process participants. The transition from centralized to distributed ledger systems implies about 80% of changes in business processes, and only 20% will be directly driven by technology. Given that large businesses have already built workable structures, the motivation for experimentation is already more than enough.
Today, many projects in various industries using blockchain technology have already been launched worldwide. However, it is still too early to talk about any mass scale. Blockchain solutions and developments have IT monsters such as Microsoft (Azure Blockchain as a Service), SAP, Samsung, IBM, and others in their portfolio. Besides, a lot of other blockchain projects are launched by various startups.
At the World Economic Forum, blockchain was identified as one of the global trends of the next decade. It could affect many processes not only in the commercial sector but also in the public sector, from government procurement to election administration.
In Blockchain-Based Transformation: A Gartner Trend Insight Report, Gartner analysts say blockchain will definitely impact business and society in the long term. The technology is young right now, but many companies are already changing their business processes to embrace blockchain.
Right now, the crypto market is in the irrational phase of technology development — there is the idea, but we still need the infrastructure to implement it. Until 2026, we will have a phase of large investments when large blockchain projects are implemented. And then, the value-added phase will begin — when blockchain becomes popular, and we learn how to use it to the fullest.
Technological progress takes time, and blockchain, while capable, has yet to reach a form in which it can be used everywhere. As the bottlenecks are removed and the problems of this approach are resolved, blockchain projects will become more in demand in various areas.
Now that you know the state of the crypto market today and what are the prerequisites for its further development, it is time to look at the 5 most promising crypto trends in 2023. Are you ready? Let’s dive into it!
As the metaverse grows, online spaces will be created in which the user experience will be more multidimensional than current technologies support. Instead of simply viewing digital content, users of the metaverse will be able to immerse themselves in a space where the digital and physical worlds converge.
Communication and interaction in the metaverse will be possible with the help of avatars. The workspace will also change. Nowadays, there are already services that help to equip the workplace based on any preferences. The same applies to a virtual home — you can buy a ready-made apartment and furnish it with various digital objects.
The development and emergence of decentralized finance are one of the main trends attracting people to the crypto community. The main concept is classic financial transactions within the blockchain. Transactions are done via smart contracts, but compared to traditional transfers and other financial services, they completely eliminate the presence of an intermediary.
Inside DeFi, it is possible to use credit, and deposits, create derivatives, and conduct other transactions. In 2023, according to many analysts, we could see rapid growth and development in the DeFi sector as it is just beginning to emerge. According to DeFi Pulse, the value of the total value of digital assets associated with the decentralized finance sector increased from $2 billion to $15 billion in 2020. A year later, the value was almost $100 billion.
The emergence of coins such as Shiba Inu and Doge in the cryptocurrency market marked the beginning of a new era of meme coins, which are already starting to take over the crypto space. Created as a joke, such assets eventually find support not only from different communities in the crypto world but also from famous personalities, such as Elon Musk, who strongly supports the Doge project.
Obviously, the growth of all kinds of meme coins is inevitable (even if we take into account government attempts to ban them, as it happened in Thailand), as the tools to create tokens are becoming more and more accessible. For example, Meme.com, a new marketplace where users can compare meme-cryptocurrencies and create their own meme coins, whose value will depend entirely on current trends and memes they represent, has already appeared.
The growing use of and demand for stablecoins in the early 2020s did not go unnoticed by the leaders of payment companies, international organizations, and central banks. In May 2020, Visa CEO Alfred Kelly said he sees fiat-backed digital currencies as a potential emerging payment technology of the future.
Stablecoins have the potential to be widely used for money transfers and payments. So far, all stablecoins have been issued by cryptocurrency-focused companies and projects, but with the growing popularity and volume of the stablecoin market, more traditional companies may issue their own stablecoins in the future. The strong pegging of stablecoins to the commodities market in cryptocurrency trading can easily spill over into other areas, such as Forex trading.
The NFT sector began to develop in 2017, but its popularity is gaining momentum. At the end of 2021, NFTs became more widely used as a technology, which will continue to be emphasized in 2023. Ordinary users and large investors could see all the advantages of the technology, within which creative elements, for example, images, can be sold for large sums and allow for 100% ownership of the work.
With the help of technology, you can create music, paintings, video content, and sell property rights. Any asset gives full ownership rights. Analysts estimated monthly trading volumes at the end of 2021 were at around $15 million. In 2022, the indicator increased, and in 2023 these values will grow. It stems from the entire sector’s market capitalization, which increased from 3 million to 33 million in January 2022.
The crypto trends described in the article are already viral and widely used in practice. Still, in 2023 they are expected to develop more seriously, so everyone who wants to enter the world of cryptocurrencies and blockchain needs to follow the trends to be aware of the latest changes and events. The crypto market is an unpredictable and not fully explored place where new solutions, innovations, and technologies appear every year, with the possibility of their application in the real world. One thing can be said — modern developments in the field of cryptocurrencies will continue and cover even more areas of our lives.