Crypto Outlook 2023: Hippo Wallet Research Forecast

2022 Recap on the Crypto Market Industry

The world has seen a gradual post-COVID global economic recovery as the year started. For this reason, different industries propelled forward, allowing companies to ease and gain momentum throughout the year. This is the recap of te Crypto Market.

While the world also saw high rates of inflation, rate hikes, war outbreaks, and other macroeconomic problems, the impact on the cryptocurrency market was more enduring. As markets saw substantial losses this year, major cryptocurrencies like BTC, ETH, and numerous others also experienced losses of more than 50%.

Looking back, BTC was approximately $48,000 at the beginning of the year, and Ethereum (ETH) was worth about $3,800. Now, it's more probable that 2022 will end with Bitcoin trading at roughly $16,000 and ETH trading at around $1,000. This year, BTC fell 64% overall and ETH fell 66%, which is concerning for cryptocurrency traders.

Crypto Market Winter: How Long Will This Last?

Analysts say crypto winter might last longer because of global, macroeconomic factors. The industry has seen a crypto market chaos that hopefully would not continue into 2023.

CEO of CoinLedger, David Kemmerer, commented on the matter and said:

“The ongoing crypto winter could last longer this time, that’s because of macroeconomic factors: 40-year highs in inflation, rising borrowing costs, and political instability after Russia invaded Ukraine.”

Analysts believe that with these struggles, this year’s crypto winter might be different from the bearish markets before.

In retrospect, this downturn is not only seen in the crypto industry. Even some major tech stocks have seen the same depressing values—Meta (-67%), Netflix (-52%), and even Apple (-22%).

Crypto Outlook 2023

According to Gin Chao, the former Strategy Chief at Binance, by the end of 2023 traders would experience ease and highs of values based on BTC's prior cycles and crypto traders' expectations on the lows of 2022. However, it may be a little later depending on macroeconomic circumstances.

For ETH, analysts claim that the network has yet to reap the benefits of Ethereum Merge due to the crypto winter, and the coin will increase in value over the next months—allowing traders to enjoy a strong bull case.

Furthermore, if large cryptocurrencies like BTC and ETH have seen the "worst," smaller altcoins have also seen difficult times, if not worse. While the value fluctuations of BTC continue to have a significant influence on other altcoins, the macroeconomic environment still needs to improve in order to boost the prices of all cryptocurrencies. Additionally, cryptocurrencies may need to hang on a bit longer in this uphill struggle while the bear market is still in full swing.

On the plus side, some analysts believe that the rise in state-sponsored stablecoin projects will increase competition for stablecoins. As an illustration, Circle, the developer of USD Coin (USDC), will introduce a Euro-backed stablecoin on Solana (SOL) soon after being removed off Binance's list. In addition, Japan, Turkey, and China, all have plans on rolling out their own stablecoins by next year.

Conclusion

Despite all that is happening, including upcoming crypto projects and deFi plans, one thing is certain: Investing in cryptocurrencies still carries risk.

As always, be cautious to only invest in things you are familiar with, to only invest what you can afford to lose, and to thoroughly investigate any assets you are considering purchasing.

Disclaimer: This article solely expresses the author's thoughts, which may not reflect those of Hippo Wallet. Nothing in this article should be interpreted as investment guidance. Hippo Wallet encourages all users to do their own research before investing in cryptocurrencies.

Sources: Forbes, Nasdaq, Simplywall