2022 will best be remembered as a period of frosty financial outlooks on most assets. The crypto winter is still ongoing, but 2023 promises to signal a trend reversal. As the global economy begins to adapt to the new hardships and investors are looking for new means of raising and multiplying capital. Cryptocurrencies are a solid alternative in this regard. The following is a list of five major predictions on cryptocurrency market dynamics and adoption in 2023, considering current trends and traction.
1- Higher Bitcoin Adoption
By the end of 2022, over 500 million people will own Bitcoin. The numbers imply that more retail outlets will start accepting cryptocurrencies as a means of payment to tap into the new potential client base of digital asset holders. With over 17,000 online and offline retail outlets accepting Bitcoin in 2022, the number will continue growing in 2023.
2- Bitcoin Will Go Financial
The new cryptocurrency legislation of the United States suggests that Bitcoin could be accepted as an exchange-traded asset. This will imply the almost immediate launch of Bitcoin Exchange Traded Futures for spot trading. The Securities and Exchange Commission gave the green light to ProShares’ Bitcoin Strategy ETF in 2021. If the ETFs are launched, the market will experience an influx of new traders.
3- Stablecoins Will Dominate
The growing uncertainty of the global financial market is pushing inflation and the depreciation of national currencies. Such negative traction is forcing people from Africa, Turkey, and other countries to seek refuge in other means of value saving. Stablecoins pegged to the US Dollar, like Tether, or gold, are growing in popularity. The impending launch of CBDCs, possibly even in the United States with the acceptance of new legislation, will propel crypto stability and drastically reduce market volatility.
4- DeFi Will Grow
The decentralized finance sector will continue to see growth in 2023. Having surpassed the $13.61 billion mark in 2022, DeFi is attractive to investors due to its versatility and convenience as an alternative to the traditional banking system.
5- Regulation Will Be Passed
The United States and the European Union are developing their crypto regulatory frameworks. The EU passed its MiCA directive in October of 2022, and the Biden administration has drafted its regulation, aiming to push it through Congress. At the same time, other countries are overseeing both frameworks in anticipation of guidance. All news backgrounds suggest that comprehensive crypto regulation will be introduced in 2023.
Global cryptocurrency adoption is growing rapidly, with nations moving for digital economies in efforts to deviate from depreciating national fiat currencies. Such propagation of decentralised finance also forces people to seek conventional means of payment in innovative solutions.
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