Cryptocurrency

Here’s What Could Happen To Cryptocurrency In 2023

Written By: Eric Williams
Reviewed by: Mike Reyes
Last Updated January 17, 2023
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red and blue light streaks

Opinions on crypto have always been and continue to be divided, but there are certain facts that can’t be argued. For example, it’s obvious to everyone that digital currencies have a short but tumultuous history behind them. Over their limited lifetime, cryptos have experienced sudden spikes in value and equally dramatic downfalls. Bitcoin has gone through no less than six bear markets and lived to tell the story. And since Bitcoin is the leader of the crypto market, whatever happens to it gets reflected in the entire ecosystem. When Bitcoin crashes, the whole market collapses with it, in a ripple effect. Similarly, when Bitcoin price soars, Ethereum price also tends to climb, and all the other altcoins benefit from the upward movement.  

Investors and crypto enthusiasts have gotten used to these regular cycles of rise and decline, but this doesn’t make it any easier for pundits to decipher and anticipate the market’s evolution. Due to this inherent volatility, no one can tell for sure what will come next. However, since cryptos have proven their resilience, and it’s pretty clear by now that we’re going to see a lot more of them in the future, analysts are doing their best to foresee possible trends and figure out what may happen in the new year. May is obviously the operative word here, as nothing is set in stone in the crypto space, and things can change from one day to another without any warning.

So, let’s see how the crypto saga may unfold in 2023 and what the next chapters could bring to the table. 

Ethereum might take the lead

The crypto environment has only ever had one master – Bitcoin. The original digital currency was the one that set the foundation for the current cryptocurrency industry and established itself as the largest and most popular crypto by market cap, despite its successive highs and lows and the increasing number of altcoins emerging over the years. Although plenty of other projects have garnered attention from traders and investors, none of them has come close to Bitcoin’s performance, with Ethereum being the only notable exception. 

If there’s one cryptocurrency that could ever pose a threat to Bitcoin’s supremacy, that is Ethereum. The rivalry between Bitcoin and Ethereum has been going on for years, splitting the crypto landscape in two. However, not once has Bitcoin been in any real danger of becoming the second-best. There were a lot of discussions as to when and how Ethereum could overtake Bitcoin and steal its title. Up till now, nothing of this sort happened because these two assets are highly correlated, and their prices tend to move in the same direction. 

This synchronicity might finally come to an end in 2023 and allow for a change in the hierarchy. There are several factors in support of this prediction. First of all, despite their correlation, Bitcoin and Ethereum have evolved differently over the past years. While Bitcoin’s trading volume has remained somewhat steady, the number of Ethereum transactions has increased significantly year after year. If this trend continues, Ethereum could one day – potentially in the next 365 days – surpass the current crypto king. 

Another factor that could contribute to the switch is people’s perceptions. As the crypto market matured, people have become more aware of how digital currencies work and are now a lot more educated on the pros and cons of each project. If we were to draw a comparison between the two, there’s a huge discrepancy in terms of utility. 

While Bitcoin is nothing more than a virtual currency that can be used as a means of payment and a store of value, Ethereum is a complex blockchain-based platform that boasts a wider range of use cases. For this reason alone, Ethereum has greater chances to weather the storms in the crypto market and solidify its presence in the years to come. Following the merge, Ethereum has become even more appealing to existing and potential users, given its increased sustainability, something that Bitcoin has yet to achieve.  

Meme coins continue to lose ground 

In the beginning, meme coins weren’t taken seriously, considering they started out as nothing more than a joke. But then, following a few tweets from Elon Musk and massive social media coverage, meme coins were propelled to stardom. However, as many had already predicted, this stardom didn’t last too long. Shortly after reaching their peak, meme coins started to enter a slippery slope of value loss. While some experienced major price drops, others were completely wiped off the map. 

Their kind is not yet extinct, but it’s very probable their demise is near. The main reason why meme coins are headed toward redundancy is their lack of utility. There’s nothing special about meme coins that could separate them from the rest of the altcoins. They don’t even make people laugh anymore. With no competitive advantage or distinguishable features, meme coins are bound to lose their shine in 2023. 

The crypto winter could last a little while longer 

The latest crypto winter that started somewhere between the end of 2021 and the first half of 2022 is still well underway. Things may have calmed down a bit in recent months, but we’re not out of the woods just yet. Many experts believe that the worst part is over and we can now wait for spring to come, and yet there’s still no sunshine on the horizon. 

Although crypto enthusiasts are eager for good news, it seems they have to keep their expectations in check. The current bear market has had a serious negative impact on many crypto projects, so it’s probably going to take a little while longer than usual for the market to recover. The only thing that could help in this respect is crypto regulation. However, creating viable regulatory frameworks is in and of itself a complicated and time-consuming endeavor, which means there will be a few more winter months to push through until the next bullish trend. 

Although these predictions might come true, we already know that the crypto industry is full of unexpected surprises, so if you’re planning to join the crypto hype, you should tread with caution. 

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