In 2022, 16 percent of American adults said they had traded or used cryptocurrencies in some capacity. 2023 is sure to pull even more Americans into the world of cryptocurrency investing.
If you plan to buy crypto in the new year, you’ll want to learn about upcoming cryptocurrency trends. Staying ahead of the game can provide a big advantage when it comes time to invest in crypto.
The following guide will cover 12 upcoming trends for 2023 to help you develop the best cryptocurrency strategy.
1. New Meme Coins
As of 2022, there are more than 200 meme coins available to crypto investors. Many thought that meme coins were just a fad, but expect even more to enter circulation during 2023.
If you don’t already know, meme coins refer to popular coins that basically go viral on the internet. They’re usually slightly comedic in nature and tied to a meme. Be aware that most of the coins are extremely volatile and have little or no intrinsic value.
With that being said, the meme coin Dogecoin has registered a market cap of over $11 billion since its 2013 creation. Only time will tell if another meme coin can skyrocket in 2023, but many newcomers are likely to try.
2. Demand for Reliability and Speed
Investors usually look for safer assets in bearish markets during volatile times. For the world of crypto, that usually means either bitcoin or stablecoins. BTC has always snapped back after crashes and has shown excellent resiliency.
Bitcoin will pull the weight and help the market recover in 2023 and it has done time and time again. Savvy investors might also turn to Ether because of its powerful presence in the DeFi realm.
Expect currencies with faster transaction speeds to be in high demand as well. The XRP vs bitcoin speed comparisons could be a hot topic as Ripple attempts a comeback.
3. Metaverse Involvement
Metaverses don’t currently have a big social foundation to stand on, but that could change in 2023. Expect several metaverse crypto projects to start getting attention in the new year. As more people join the metaverse, more investors will take notice.
The metaverse allows players to go to concerts, casinos, and other social events to interact with others. Players can make their own social experiences without any understanding of coding and get paid for them.
For example, Metacade plans to be a totally decentralized metaverse arcade. It will offer several Play to Earn games designed for and selected by the Metacade community. Projects like Decentraland aim to let players sell decentralized plots of digital land.
4. A Defining Year for NFTs
NFTs were all the buzz throughout 2021 but things changed for the worse very quickly during 2022. Opensea, the largest NFT and digital collectible marketplace in the world experienced severe volatility.
Opensea reported its biggest monthly trading drop in January 2022 which was a whopping 94% decline. The decline was so jarring that analysts wondered if it marked the death of digital collectibles.
NFT volume might make a recovery in 2023, but it’s highly unlikely that they’ll reach their peak 2022 levels. That’s not to say that they won’t ever fully recover, just not in a single year’s time.
5. More Regulations
Expect more crypto regulations to emerge in 2023 on a global scale. The goal of lawmakers around the world will be to set new laws and guidelines to protect crypto investors. That added protection might be enough to attract a lot of new investors to crypto.
Tougher regulation should help discourage cybercriminals and cut down on fraud. Although, different agencies might not have jurisdiction over everything they want which makes the process slightly complicated.
President Biden plans for the IRS to track the crypto activity of US citizens closely and make sure they report their taxes. This will make it much easier for investors to report crypto losses as well.
It’s predicted that taxing crypto in 2023 could generate $5 billion in revenue. Furthermore, it’s expected to generate $11 billion over the next 10 years.
Not all investors see added crypto regulation as a good thing, and that might affect prices as announcements get made. But the majority of experts agree that regulation is a positive for the industry’s long-term success.
6. Crypto ETFs
There’s a good chance we’ll see more crypto ETF approvals in 2023. In 2021, the very first Bitcoin ETF arrived on the NYSE. The development was a breakthrough and provided investors with a traditional way to invest in cryptocurrencies.
The Bitcoin ETF named BITO allows investors to participate in the crypto market straight from conventional investment brokerages. Investors don’t even need to make new accounts, they can use existing accounts on platforms like Vanguard or Fidelity.
It’s important to note that some experts aren’t totally sold on the BITO ETF. This is because is only linked to BTC and it might hold futures contracts instead of BTC itself.
Experts state that while Bitcoin futures follow the general trends of the actual crypto, they may still not track the price of Bitcoin directly. Thus, investors may want to continue waiting for an ETF that holds Bitcoin.
2023 might be the year that an ETF pops up that holds actual Bitcoin so keep your eyes peeled. Although, expect the ETF to be risky and volatile just like the crypto it holds.
7. Web 3.0 Makes a Splash
Expect the 3rd version of the internet called Web 3.0 to gain more traction in 2023. It will offer a sustainable answer to those who want to run their websites without using a large corporation’s server or paying expensive fees.
Web 3.0 will let people personalize the internet and prevent single-point failure. That means that a site can crash and other activities won’t get affected by it.
The emergence of Web 3.0 could also help boost cryptocurrencies like Ethereum and Livepeer. Basically, any cryptos that are connected to the internet’s 3rd version in some way.
8. Added Features for Corporations
Giant brands such as Google, Disney, Microsoft, and Google will continue exploring cryptocurrencies and metaverses in 2023. They’ll also pay close attention to dynamic use cases and how cryptocurrencies integrate with NFTs and metaverses.
Currently, Microsoft is creating an environment to let workers engage with one another more efficiently no matter where they’re located. The project called Virtual Office uses blockchain tech and should bring more versatility to corporate dealings.
Investors are watching closely to see how much corporate interest might increase next year. It could create a lot of new use cases for different crypto services and products.
9. Crypto Goes Green
It’s no secret that cryptocurrencies thus far had a harmful influence on the environment. For instance, the carbon emissions from Bitcoin mining have raised a lot of concern in recent years. It takes a ton of energy to power BTC’s proof of work method.
Fortunately, new blockchain networks hope to provide more eco-friendly practices in 2023. Expect the crypto sphere to begin adopting more ways to use green energy instead of fossil fuels going forward.
10. L2 Smart Contracts
Experts predict a rise in popularity for Layer 2 smart contracts throughout 2023. Currently, the two biggest cryptos are Bitcoin and Ethereum and they’re both Layer 1 cryptocurrencies. So, if Layer 2 keeps gaining traction it could really shake up the market.
Layer 1 blockchain networks don’t offer any scalability which is what L2 smart contracts hope to improve. The ability for cryptocurrencies to have infinite scalability is crucial for digital currencies to reach mainstream success.
11. Ethereum 2.0 Makes a Statement
Expect Ethereum to fully switch from proof of work to proof of stake during 2023. The transition will save a substantial amount of energy when it switches its validation process.
Ethereum 2.0 should also bring down the circulating supply by adding EIP 1559. That means the price of ETH might spike due to scarcity.
ETH upgrades should also improve the speed of transactions and scalability. Anyone with basic computing power will also be able to run a validating node.
12. Cryptocurrencies and War
Digital currencies played a part in Russia’s invasion of Ukraine for both countries in 2022. For example, Russie used crypto to battle sanctions and prevent limitations.
On the other side of things, Ukraine accepted crypto donations to help aid its efforts. Expect more individuals and organizations to support Ukraine via crypto donations as the war continues.
Follow Cryptocurrency Trends
Now you know 12 cryptocurrency trends you should follow in 2023 to help you invest. While the wild world of crypto is hard to predict, there are certainly great clues about where it’s heading.
From meme coins to facilitating wars, 2023 should be another thrilling year for digital currencies. Check out our site’s crypto category for more in-depth information and helpful tips.