January 10, 2023
2022 was a volatile year for the cryptocurrency market, with most assets losing value. Suffice to say, it caught many investors and market participants by surprise. Of course, no one knows for sure how this industry will act from year to year. However, we will give you our best cryptocurrency predictions for 2023.
Using past data, we created a list of seven events to watch out for in the coming months. These changes in the crypto market will impact how you trade, interact with the web, and diversify your crypto and/or stock portfolio.
To plan for your future crypto investments, you need to make educated guesses about what’s coming. To help, we combined past statistics, research, and expert opinions to find what crypto events are most likely to occur.
Regulators across the world turned their focus to cryptocurrency in 2022. Increased regulation is sure to continue into this year. It’s debatable whether the cryptocurrency market will improve with regulation. However, after the collapse of the FTX crypto exchange last year, many agree it’s needed. When such huge crypto companies collapse, investors lose trust in the market.
Cryptocurrency is becoming a more mainstream payment method. Hence, governments want to implement litigation that protects their consumers. The U.S. set the foundation for more regulations in 2022. President Joe Biden’s executive order in March of 2022 demands federal agencies report on the market.
The same movement is occurring in Europe. The EU ended the year pushing for the MiCA (Markets in Crypto Assets) Regulation. It covers
However, more regulatory control could also hinder your trading freedom. Be sure to keep an eye out for what regulations are coming to your country. It’s not a matter of if, but when.
Web3 is the next innovative phase of the internet. Many internet users are excited to usher it in for improved connectivity and privacy. Web3 is also a game changer for tech professionals, as it will create many new career opportunities in 2023 and beyond.
A large part of Web3 depends on decentralized blockchain technologies. From NFTs to your world in the Metaverse, there are Web3 investment opportunity. We predict the following will occur in 2023:
All these changes will streamline crypto onramps and increase mass adoption. Even major companies like Nike, Disney, and Starbucks are investing in Web3. Soon, news about Web3 will be difficult to miss!
A bear market is defined by continuously declining prices, falling over 20% from their original value. It’s the opposite of a bull market - where prices rise for a sustained period. The RSI (Relative Strength Index) trend line hasn’t broken, though it came close in 2022. When it does, it signals a market bottom. The current bear market has lasted over a year, with Bitcoin prices down to around $15,000.
Suggested reading: The Bitcoin Bottom - Are we near the end?
Bear markets make it difficult to turn a profit, but they do present great opportunities to buy in at a low price. This is the longest-running Bitcoin bear market. All four quarters of last year didn’t see a significant rise in prices, and this trend will carry on.
Though the bear market will continue for most of 2023, we predict a market reversal at the end of the year. There are several technical indicators of a bear reversal, and there are many events that can trigger a bull run. Trends in prices that confirm a crypto bottom and the RSI can signal a bull run is about to happen.
Recently, Du Jun (co-founder of the crypto exchange Huobi) gave his expert opinion on the topic in an interview. Bull runs are linked to the Bitcoin halving, which happens around every four years. The most recent halving, which halves the amount of Bitcoin in one block, was in 2020. This event is necessary to counter inflation and maintain the scarcity of Bitcoin. With the next halving approaching soon, the reversal may begin at the end of this year and continue into 2024.
That being said, Du Jun made it a point to clarify that
“It is really hard to predict exactly because there are so many other factors which can affect the market as well — such as geopolitical issues including war, or recent Covid, also affect the market.”
After Bitcoin, Ethereum is the most popular cryptocurrency - and for good reason. The blockchain uses a proof-of-stake consensus mechanism. This sets it apart from Bitcoin’s proof-of-work model.
Suggested reading: Proof-of-stake vs. proof-of-work
It’s incredibly versatile, as you can use ETH to create your NFT or decentralized applications (dapps).
Even though their use cases greatly differ, Bitcoin and Ether have a strong correlation. A correlation that we think will finally end this year. We believe Ethereum’s user cases finally have enough to shine and inspire a rally past BTC this year - even if just for a moment.
With over one million daily transactions for the past two years, 2023 is Ethereum’s year. Its ability to act as a medium for dApp (decentralized application) creation will set it apart from other cryptos.
Using the US CPI (Consumer Price Index), we can see 2022 struggled with inflation. The average rate increase reached 8.0% when the international standard is just 2.0%. The higher inflation is, the harder it is for consumers to spend. This means that assets like crypto and stocks won’t increase much in value, either.
Unfortunately, Inflation isn’t going to drop to healthy levels in 2023. Though it will drop some, experts agree that inflation will stay at around 4% for the majority of the year. By the end of the year, we can expect to see it getting closer to 3%, though that’s still somewhat high.
2022 was a hard year for the stock market. It was the worst year since the 2008 crisis. We use the Dow Jones Industrial Average to measure the top 30 companies on the stock market. Last year, it fell a whopping 74 points. The S&P 500 also fell 10 points, ending the year down almost 20%. A combination of high inflation rates and worldwide crises had a severe impact on most companies in the stock market.
The first few days of 2023 haven’t been encouraging, with the Nasdaq falling another 0.4% by January 3. We predict that the current flat market will stay flat for much of the year, and it even has the potential to go lower. With inflation cooling down, however, we are more certain that stocks will improve slightly - but not by much.
In conclusion, the market outlook for 2023 looks stagnant but with recovery potential. Hence, you should prepare your portfolio to deal with whatever may come. YouHodler has several features to help you do so.
For example:
Everything you need to make the best crypto moves is easily accessible on our platform. Whether you are a passive HODLer or Active Trader, YouHodler has everything you need to make your assets work for you.
DISCLAIMER: “The content should not be construed as investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is made available to you for information and/or education purposes only.
You should take independent investment advice from a professional in connection with, or independently research and verify any information that you find in the article and wish to rely upon.”
Editor-in-Chief of the YouHodler blog. Connect with him about writing techniques, cryptocurrency, and music.
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YouHodler promotions are not targeted at UK investors, and bonuses or loyalty programs like the rewards programme or sign-up offers will not be available to residents of the UK. You can learn more about the services offered to UK customers here.
Do not invest with YouHodler unless you’re prepared to lose all your money or tokens invested. Crypto Currency is considered as a speculative and high‑risk investment and you are unlikely to be protected if something goes wrong. Take 2min to learn more about risks.
YouHodler is regulated in the EU (Italy) and Switzerland, and does not have a regulated UK entity. YouHodler is NOT regulated by the FCA, and protections offered under UK law do not apply.
YouHodler promotions are not targeted at UK investors, and bonuses or loyalty programs like the rewards programme or sign-up offers will not be available to residents of the UK. You can learn more about the services offered to UK customers here.
Do not invest with YouHodler unless you’re prepared to lose all your money or tokens invested. Crypto Currency is considered as a speculative and high‑risk investment and you are unlikely to be protected if something goes wrong. Take 2min to learn more about risks.