5 Predictions for the Cryptocurrency World in 2023

14th March 2023

The world of cryptocurrency is always changing, with new innovations and developments emerging on a regular basis. Keeping up with these trends can be a challenge, but it is essential for anyone who wants to make informed decisions about their investments and future plans. In order to help navigate this complex and rapidly evolving industry, we’ve put together a list of 5 predictions for what we can expect from the cryptocurrency world in 2023.

However, all the predictions are worthless if you do not follow the situation in the world of cryptocurrencies. Your best assistant will be Chainbroker (chainbroker.io). The site gathers the best crypto projects, and you can keep track of them almost in real-time.

So, let’s get started!

1. Ethereum Has a Good Chance of Surpassing Bitcoin in Market Value

It may sound like science fiction, but ETH has every chance of pulling ahead. However, it will only have that chance in the short term. The difficulty in making this prediction lies in the fact that Bitcoin and Ethereum are typically strongly correlated, meaning that movements in one usually result in similar movements in the other. It is rare for digital currencies to deviate from Bitcoin’s trajectory and show independent movement based on their own distinct news or data. However, with stocks experiencing a bear market and the possibility of a recession looming over the US economy, there is potential for cryptocurrencies to demonstrate individualized behavior.

Although Bitcoin has always been popular, one can argue about its usefulness. The average number of transactions made with it has remained about the same as seven years ago. With Ethereum, the story is completely different. Back in 2016, the number of transactions reached only 40 thousand, but now it is almost a million. As a consequence, the conclusion is obvious: Ethereum is capable of surpassing Bitcoin, albeit for a short time.

2. Brazil Will Become the Friendliest Country to Digital Currencies

Latin America has witnessed the swiftest uptake of cryptocurrencies and stable coins globally, owing to persistent inflation and a youthful populace. Brazilian regulators have taken a proactive approach by offering private companies an experimental space to explore this domain. Itau Unibanco, the largest bank in the country, intends to introduce a platform that will convert conventional financial instruments into tokens and furnish depositary services to its clientele. The tokenization of sovereign debt could be the initial focus in Brazil.

3. There is a Risk that Large Crypto Exchanges Will Fail

The mention of the bankruptcy filing of FTX often comes to mind when discussing the risks linked to cryptocurrencies. Despite being one of the largest digital currency exchanges in terms of trading volume, FTX’s liquid assets fell short of its liabilities, resulting in the filing for bankruptcy protection in November.

We will not talk about any particular exchange that may cease to operate. But here is one interesting fact: the accounting firm Mazars has announced that it will suspend its work with cryptocurrencies. Its client list includes:

  • Binance;
  • Crypto.com;
  • KuCoin.

We cannot say that these exchanges will be the problem. However, it is worth being wary, because apart from Coinbase Global, not a single exchange conducts public audits. So we can’t be completely sure that the other exchanges have enough reserves.

4. Shiba Inu and Dogecoin Will Continue to Lose Value

Shiba Inu and Dogecoin were the most talked-about coins in the cryptocurrency space in 2021. Dogecoin experienced an enormous surge of over 20,000% in a six-month period leading up to Elon Musk’s appearance on Saturday Night Live, where he was referred to as “The Dogecoin Father”. During the same time frame, Shiba Inu had an unprecedented lifetime increase of more than 121,000,000% between January 1, 2021, and its peak on October 27, 2021. However, both of these meme coins have since lost roughly 90% of their value since reaching their respective highs. Taking into account various factors, I expect this downward trend to continue into 2023. Here are the most compelling reasons for this decline:

  • Both of these coins are payment coins. You may ask, what is so special about payment coins? We will boldly answer that there is nothing. Moreover, there are hundreds of payment coins today, so meme coins are no different from them.
  • One of the advantages of both tokens is that they are talked about a lot on social networks. However, that is where the advantages end. Investors are much more interested in how useful tokens can be. Neither Shiba Inu nor Dogecoin offers anything resembling competitive advantages or differentiation, which means it is pointless to pay much attention to them.
  • In addition, interest in payment coins that soared in a short period of time cooled off very quickly. See for yourself: almost every payment coin that gained 20,000% or more in a short period of time continued to trail between 93% and 99%. SHIB and DOGE are no exception, so the same fate most likely awaits them.

5. Off-Chain Assets Worth Over $10 Billion Will Be Tokenized by Financial Institutions

Financial institutions aim to streamline storage and settlement processes, while also reducing costs for customers, by utilizing blockchain technology. MakerDAO is already planning to place over $1 billion in U.S. Treasury bills and other government securities with the help of BlackRock and Coinbase, allowing DAI holders to earn higher returns on their deposits. We believe that Ethereum, Polygon, Avalanche, Polkadot, and Cosmos are the most favorable open-source blockchains in this regard. Additionally, we predict that VanEck, a leader in the industry, will introduce real assets on open-source blockchains in 2023.

Final Thoughts

Despite all the predictions, the world of cryptocurrency is capable of surprises. They may or may not be pleasant. In any case, we do not make any investment recommendations. You can read our forecasts and analyze them, but you should make your investment decisions only after you have a good grasp of the situation yourself.