What can we expect for the crypto market in 2023?

The year 2022 will surely go down in history given the major events experienced in the crypto market. But are the forecasts more positive for the coming year? Can we expect market sentiment to improve and how can we take advantage of the current bear market?

Status quo in the 1st quarter of 2023

In the first quarter of 2023, there will be no significant events that can fundamentally change the market’s movements. The cryptocurrency industry is still under pressure, which means that rapid development and recovery should not be expected. Most likely, during the first three months of 2023, bitcoin will fluctuate between $17,000 and $18,000 and periodically show growth and then decline.

Large fluctuations in the price of ETH should not be expected. The token will be between $1300 and $1500. And this trend will continue for several weeks.

A similar picture will be seen in the market for non-fungible tokens. Trading volume is decreasing and the number of traders in the trading rooms is decreasing.

Stricter rules for centralized exchanges

FTX’s negative experience has once again proven that regulation and transparency of centralized cryptocurrency exchanges is a necessary step towards a safe and sustainable market. Already now, the FATF, the EU and several other regulatory institutions are ready to tighten control over the work of the CEXs.

Gracy Chen, CEO of Bitget – one of the leading crypto exchanges recently commented on the situation:

In my opinion, such a move is fully justified as this framework holds us accountable, builds trust with our customers and ultimately accelerates mainstream crypto. Bitget prides itself on being a completely transparent and open exchange. At the beginning of December we announced our proof of reserves and we allow our users to verify their assets on our website. In addition, we have increased the size of our protection fund from $200 million to $300 million to protect our users’ assets against unfortunate or unexpected events. »

Increased use of decentralized economy

After observing three major insolvency events this year, including Luna, Three Arrows Capital, and Alameda Research, centralized lending activity has been further disproved, and people’s trust and demand for “decentralized lending” will further increase, opening up long-term opportunities and innovation for decentralized finance (DeFi).

In fact, the market has seen exponential growth in the number of users purchasing self-service wallets. Over the past few weeks, Ledger’s sales volume has increased by 35%. Users also tend to prefer decentralized trading solutions such as peer-to-peer (P2P) trading. In Europe, P2P grew by 28% last month.

Invest in 2023

The cryptocurrency market remains quite volatile, so it is difficult to provide investment advice. However, there are certain strategies you can adopt during a bear market.

The first rule is to diversify your portfolio to spread investment risk.

The second tip is to make a dollar cost averaging (DCA) plan as a strategy with bitcoin and ether on a monthly basis.

These tokens are more likely to show rapid growth over the next 1-2 years. Another good investment strategy is staking, as it can provide passive income with lower risk.

BTC and ETH are the main projects that represent the fundamentals of the crypto market. UNI and AAVE benefit from CEX’s R&D. DeFi will be adopted by the market and increase its market share.

Recently, Arbitrum overtook Polygon to become the second largest public chain after ETH/BSC in terms of TVL, which shows the popularity of the fund. L2 tokens, such as Arbitrum, Starknet and Zksync, which will be issued in the future, will support more applications and are worth planning for.

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The Cointribune Editorial Board

The Cointribune editorial team unites their voices to express themselves on topics specific to cryptocurrencies, investments, the metaverse and NFTs, while striving to best answer your questions.

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