Now that the new year has begun, the same investors are enthusiastic about the possibility of overcoming the dreaded year that just ended. But will it be the scenario? Well, for some, there could be a respite. For others, the bear market would continue to maltreat the ecosystem. So, in this article, we will be looking at the whys and why-nots that could make people adopt more cryptocurrency in 2023 and beyond. Read on!
The Role of Bitcoin
As you probably know, there might be no crypto without Bitcoin. This top ranked cryptocurrency in terms of market value recently clocked fourteen years since the Bitcoin whitepaper was published in January 2009. So, what exactly does Bitcoin have to do with how people will adopt Bitcoin or not?
Bitcoin, as the one with the most dominance in the market, has had the most influence. Historically, the coin has been the one that led others to significant highs when need be. For example, projects like Solana, Polygon, and Cardano may not have hit peak value if Bitcoin did not hit its all-Time High (ATH) of $69,000 in 2021.
Apart from that, when talks arise about adopting crypto as legal tender, the first mention of any cryptocurrency points to Bitcoin. So, it was not surprising when El-Savador officially adopted the Bitcoin standard in 2021, even though much of the investment made in the coin has resulted in losses. Irrespective of the shortcomings, Bitcoin remains the sole cryptocurrency recognized, not necessarily legalised by almost all countries in the world.
Unfortunately, the past year (2022) could have been better for the coin. After it hit its ATH in 2021, there was a lot of aura around Bitcoin. In fact, several newbies were attracted due to the incredible resurgence that only took a few months. This enthusiasm was what most people took into 2022. Unfortunately, this enthusiasm resulted in quite the number of crypto scams. If you have been a victim to such a platform, please accept our sympathy and suggestions for better alternatives. According to our experts, during 2022 one of the best performing platforms was Immediate Edge. While it might not suit your taste, it will definitely not end up stealing your money so no harm will come from checking it out.
However, a bull market was not to be the lasting case as the Bitcoin price shattered into pieces. Several occurrences negatively impacted the coin price. For context, issues like the Terra LUNA crash, Celsius halting withdrawals, Coinbase layoff, and FTX collapse all contributed to why Bitcoin and other cryptocurrencies failed to pick up a value increase. Notably, this has affected the trust that investors and intending participants have in the ecosystem. However, there has been talks about self-custody and using Decentralised exchanges (DEXes). Still, it has not wiped out conversations about being careful in the market.
So, in 2023, it might be possible to see less cryptocurrency adoption unless projects, exchanges, and notable stakeholders do the most to help regain the lost trust. For sure, the Bitcoin price also has a role to play in this regard.
More Developments Around Ethereum
If there is one crypto that has proven its importance to the ecosystem in recent times, it’s Ethereum. The Vitalik Buterin-led blockchain, against all odds, switched from the Bitcoin-loved Proof-of-Work to Proof-of-Stake. The event, known as the Merge, marked the largest consensus switch in history.
Interestingly, a large part of the crypto community expected the translation to come with a price increase. The opposite was, however, the case as ETH traded lower than $1,000. Regardless, the Ethereum community deemed the event a success. Meanwhile, developers from the Ethereum team have assured that people will see more of several developments in 2023.
A noteworthy one that has stayed on the lips of ETH holders is the one that concerns staking. This is because holders who stake would get rewards for their contribution. However, only some Ethereum holders have the potential to stake as the Etheruem staking process requires a minimum of 32 ETH. In a situation like this, it is expected that it will drive more inclusion for cryptocurrencies and widespread adoption. At the same time, things are not guaranteed as many experts do not anticipate a bull market in the new year. As you know, beyond all the developments, crypto prices are the major factors driving complete beginners' attention.
Decentralised Exchanges to the Rescue
In addition, one thing sure to happen in 2023 is using decentralised exchanges. As mentioned earlier, the crypto community now has trust issues with centralised exchanges like Binance and Coinbase.
Even though they are not the main culprits, the FTX crash, where its embattled CEO, Sam Bankman-Fried, had to deny some truths, has affected users’ urge to keep their holders in non-custodial wallets.
Yes, these exchanges tried to reinvent themselves with the Proof-of-Reserves method, but it seemed like it was not effective enough. So, this offers a chance for decentralised exchanges, of which some have been reaping the rewards. Protocols like Uniswap and the Trust Wallet DEX have experienced more usage since the incident.
In 2023, expect to see more movement of assets to the side. Besides DEXes, more investors may move their assets to hardware wallets like Ledger or Trezor. The challenge towards adoption, in this case, is that it has now become “more expensive” to hold crypto. Either you risk holding or centralised exchanges, keep in DEXes or spend more to invest in more secure hardware wallets.
Despite the drawback that crypto has faced in the now ended year, you cannot say it is over for the industry. Yes, there have been times when prices dipped lower than 70%, and it’s not necessarily different from the current situation.
However, you might be doing yourself a lot of good by reducing your expectations in 2023. Concerning adoption, it might keep increasing, especially with inflation ravaging economies and declining growth conditions. Nevertheless, many now consider Bitcoin and other cryptocurrencies not to be hedges against inflation.
So, if anyone is getting into the ecosystem newly, it should be for the long term. At the same time, activities like futures trading can also provide short-term profits for those who know how to go about it. For beginners, this is not an advisable venture to try out with proper guidance. As usual, remember that the crypto market is highly volatile. That said, only invest money you can afford to lose, research, or speak to a financial expert.