2022 has been a challenging year for investors. Many have seen much of their capital vanish into thin air as prices plummeted. And while there’s no point comparing the situations of different investors depending on the assets they chose to incorporate into their portfolios, it is worth noting that the world of digital asset trading has received some rather harsh consecutive blows. Although cryptocurrencies have recorded plummeting values and sudden spikes before, there are no years quite like 2022. The prices of most coins dropped by more than half, an event that has been particularly painful for investors to witness.
However, 2023 has renewed the hopes of most, who are now convinced that the market is slowly on the mend and the worst is behind. Exchanges such as Binance report consistently on the latest value fluctuations. So, whether you’re interested in the Ethereum price or that of any other altcoin, you should always check the platforms before making a definitive trading decision.
But what can you honestly expect from 2023? Are investors out of the woods, or should caution remain the rule?
Blockchain innovation
Ethereum has long been recognized for the versatility of its blockchain. Not only is it the home of Ether, the native coin, but it also hosts several others. It has been at the forefront of decentralized processes, such as those within DeFi. Many believe this technology will alter the financial landscape in the near future, so becoming familiar with them by investing in Ethereum isn’t a bad idea at all.
The blockchain is also constantly evolving and developing as well, increasing its popularity with users. Even those that aren’t interested in cryptocurrencies are likely to give Ether a chance, drawn in by how in tune it is with the latest trends. For instance, who could forget the NFT craze that had permeated the trading world only a few years ago? That was also due to Ethereum’s influence on the digital asset market.
After the Merge of 2022, the next planned upgrade is Shanghai. It will arrive sometime in the second quarter of the year and will enable users to make ETH stake withdrawals. Investors had awaited this change for quite some time, since December 2020 to be exact, when the procedure was locked in the deposit contract. The upgrade has the potential to increase stability and increase the amount of Ethereum that is used to create stakes. A danksharding design is still in development and could further improve the efficiency and scalability of the Ethereum blockchain.
Investment DAOs
Investment DAOs will become more relevant to the market as they are a secure alternative to GP/LP structures. Yet another benefit is the additional transparency, which most investors are keen on nowadays. Investment decentralized autonomous organizations, known as the more accessible DAOs, will become more numerous due to their potential as collaborative vehicles that can deploy and allocate capital. The rise of these organizations comes in the context of decentralized finance becoming increasingly attractive to investors. Alongside DeFi and Dapps, DAOs will also come with a shift in decision-making within the financial world. While traditionally, the focus is placed on the opinions of a few experts, decentralized organizations operate with the consensus of global membership. They will also prove ample high-potential investment opportunities for investors looking for a challenge.
ETH vs. BTC
The first month of 2023 has come with significant gains for Bitcoin. While it has recorded little else but losses since July 2022, January 2023 has seen the coin register consistent growth. This has led to investors looking at the market with renewed optimism. After all, if the Bitcoin price climbs up, it’s not far-fetched to expect substantial growth in the entire market.
This is the case for Ethereum traders, who know that the two coins are typically correlated. ETH is the most prominent altcoin and one of the most popular digital assets on the market. When one rises or falls, the other usually follows. However, in 2023 some analysts have estimated that ETH might surpass BTC, albeit only briefly. These estimations are based on the fact that, while Bitcoin is typically more desired due to its scarcity, it is behind Ethereum in terms of utility. There are more daily transactions in Ether than take place every day, and the number has been rising constantly over the years.
While in 2016, there were approximately 40,000 daily transactions, the number climbed to around 700,000 over the next five years and has been above one million since 2020. Meanwhile, the number of Bitcoin transactions has remained roughly the same over the past five years. For this reason, many believe that it won’t be long until Ether overtakes Bitcoin.
Price predictions
When discussing cryptocurrency, you’ll naturally focus on price predictions. The market is known for being particularly volatile, and even well-established currencies such as Ethereum aren’t safe from the occasional fluctuations. Over the course of the last year, investors have had to put up with quite a lot of trouble. The bearish market has brought on a crypto winter that has been particularly difficult.
And while many traders have abandoned their portfolios already, cutting their losses before losing capital any further. Others have maintained their hopes that Ethereum is bound to bounce back sooner or later. These predictions are fueled by the fact there have been similar events in crypto history, and the coins have recovered after every single one of them.
If Ethereum begins to gain more momentum among investors, you can expect that 2023 will be a bullish year for trading. Some estimate that the value could climb up to $2000. However, if the bearish tendency continues, the end of this year could find Ethereum at a little over $1500.
It is still too early to predict the possible prices that the market could record this year. As an investor, the most important thing is to be attuned to changes within the crypto ecosystem. Keeping a watchful eye on price movements and transformations can help you make sound trading decisions.