Examining the Factors That Could Affect Cryptocurrency Market Growth in 2023

The history of cryptocurrency has been bittersweet. When Bitcoin was at its peak in 2017, everyone thought there was no turning back. But, in an instant, Bitcoin crashed, and investors lost millions. Then, within a few weeks, it surged again.

Nobody can deny that the cryptocurrency market is in a slump. There was some optimism early in the year, but investors are now much more cautious about allocating their money. This applies to both retail and institutional investors, as both have been hit hard by the crypto winter.

The cautious approach to investment is driving the cryptocurrency market in a different direction. Gone are the days when money was thrown around without thought. The crypto market is going through something similar to the dot-com bubble of 2000, and 2023 will be a strong reflection of that.

On the other hand, according to a survey by Fortune Business Insights, the North American cryptocurrency trends market is anticipated to grow at a CAGR of 11.2% to reach $1,758.0 million by 2027. This increase is being attributed to a number of factors, with increasing finance and investment in the US cryptocurrency industry serving as the main driver.

According to Statista, global equity funding and investment in blockchain startup companies were valued at $3.08 billion in 2019, up from $1.25 billion in 2017. If you want to start a business with the same concept, read the Guidelines for Starting a Successful Cryptocurrency Exchange platform.

However, some positive trends are emerging from this crypto winter, which will lead us into a crypto spring. Six major trends are emerging in the industry that is expected to dominate in 2023, a year that appears to be fraught with change.

Let us go ahead with the major cryptocurrency trends to look out for in 2023 and beyond.

Top Cryptocurrency Trends for Businesses

1. Stablecoins to Take the Lead

Stablecoins are cryptocurrencies designed to reduce price volatility. These currencies are intended to be pegged to a stable asset, such as cryptocurrency, exchange-traded commodities, or fiat money.

Stablecoins may be one of the best cryptocurrency trends to invest in 2023. Two factors may be driving the growth of stablecoins. The first is the expected dethroning of tether, the current stablecoins industry leader.

Tether was among the first stablecoins to enter the cryptocurrency space. However, as the industry evolved, tether encountered numerous growing pains. Tether's market dominance may be coming to an end as new stablecoins enter the market.

2. Governments Launch Their Own Cryptocurrency

COVID-19 was not the only thing to come out of China in late 2019. Along with it came word that China intends to launch its own cryptocurrency to compete with Bitcoin. The Chinese government, led by Xi Jinping, has backed the initiative, which aims to replace the age-old cash system.

The People's Bank of China established a cryptocurrency research group in 2014, but it was closed down after Bitcoin crashed in 2017. Now that the market appears to be stabilizing, China has resumed its cryptocurrency efforts. While little is known about China's cryptocurrency, it has some similarities to Facebook's Libra.

Sweden is experiencing similar trends. The Riksbank, Sweden's central bank, announced the launch of e-krona, a proposed digital currency that will use distributed ledger technology, in February 2020. The government has stated that the primary motivation for this project is the obsolescence of physical cash.

3. The Age of Institutional Investors

One of the most significant cryptocurrency trends is the entry of institutional investors. While individual investors continue to increase their trade figures, institutional investors are expected to climb the ranks in 2023. This is novel because the cryptocurrency industry has previously been dominated by individual investors.

The entry of institutional investors will result in significantly higher trading volumes. As a result, even if the trading volume in the digital currency space is low, the industry will be able to survive.

It is still unclear how institutional investors will enter the cryptocurrency market. Several developments are expected to occur in the coming year. Many people believe that if cryptocurrency is listed on a major exchange like Nasdaq, its reputation and value will improve.

4. Cryptocurrency-integrating Payment Gateways

Regular wallets that support cryptocurrency payments are one of the most recent developments in cryptocurrency. PayPal declared that its users would be able to purchase, sell, and hold cryptocurrencies like Bitcoin, Litecoin, Bitcoin Cash, and Ethereum.

PayPal's move has paved the way for mobile wallet providers to enter the cryptocurrency industry. As previously stated, cryptocurrency investors are looking forward to decentralized exchanges where they can sell and buy cryptocurrencies. PayPal operates on a decentralized network, making it a safe option for investing in cryptocurrencies.

As time goes on, more e-wallets will offer cryptocurrency integrations to their customers.

5. The Growth of Decentralized Exchange Platforms

New decentralized exchange platforms that allow digital coin transactions are one of the best cryptocurrency trends to invest in 2023. For instance, Check Into Cash, a US-based provider of financial services, allows customers to buy and sell virtual currency.

As we enter the new crypto era, we can anticipate the growth of decentralized exchange platforms. Most cryptocurrency transactions currently necessitate the use of an intermediary. This dependency will be eliminated by these decentralized platforms.

These platforms use blockchain technology to provide a safe environment for transferring currency through the Cryptocurrency Exchange Platform. The rise of these platforms may result in the rise of prominent crypto coins such as Ethereum and Bitcoin as the go-to payment medium.

6. STOs Will Replace Initial Coin Offerings

Institutional investors, as previously stated, are likely to enter the cryptocurrency market. Why, though? What were they waiting for, and why were they waiting now?

The growing number of security token offerings is one of the major cryptocurrency trends that are attracting institutional investors today (STOs).

Currently, the premise of cryptocurrency exchange is the initial coin offering (ICO). However, because ICOs are unregulated, investors are at risk. It's one of the reasons major investors avoided investing in cryptocurrency.

STOs, on the other hand, are subject to SEC oversight. They have fewer exchange platforms than ICOs. Furthermore, STOs are supported by company shares, investor benefits, and dividends, and they are less susceptible to fraud than ICOs.

ICOs have their advantages, but with ICO scams on the rise, the need for security and regulation has grown. STOs remove this barrier, encouraging more investors to participate in the digital currency industry.

Finishing Up

While it is difficult to predict how the cryptocurrency industry will behave in 2023, one thing is certain: cryptocurrency is here to stay. With institutional investors now in the market, we can expect some significant Cryptocurrency Exchange Development and advancements in the cryptocurrency investment space.

Prepare for 2023 if you're a cryptocurrency startup. With global funding for cryptocurrency trends on the rise, 2023 will present significant opportunities for crypto businesses.