Wall Street had a rough year, but what about the performance of cryptocurrency? According to CoinMarketCap, the total value of over 22,100 digital currencies fell from almost $3 trillion in November 2021 to just $33 billion in the early morning of December 29, 2022 – a staggering 74% decrease in less than 14 months.
Still, the 74% dip in such a short time span is unlikely to stop crypto enthusiasts, considering the perpetual volatility of the space. The real question is: what will happen to cryptocurrencies in 2023? Here are four predictions.
1. Ethereum Could Temporarily Surpass Bitcoin in Market Value
Our first prediction is that the Ethereum (ETH) token could shock the world and overtake Bitcoin (BTC) in terms of market value, if only for a short while. It’s a tall order, considering the strong relationship between the two cryptocurrencies, with one usually following the other.
Still, Bitcoin has long been the king of the crypto world due to its 21 million token cap. However, its utility and effectiveness leaves much to be desired, with daily transactions having remained largely unchanged over the last seven years.
In comparison, Ethereum has seen daily transactions average 40,000 per day in 2016, around 700,000 daily in 2019, and consistently over a million transactions per hour for the last two years. Furthermore, its true utility is not in payments, but rather as a medium to develop decentralized applications (dApps).
In terms of revenue from dApp protocols, TokenTerminals.com reveals that Ethereum has outperformed all other projects over the last 12-month period, with $3.8 billion in revenues. When taking all of this into consideration, it’s possible to argue that Ethereum is more valuable than Bitcoin.
2. The Two Most Popular Meme Coins Will Lose 50% of Their Value
It’s a bit cheeky, but we’re likely to see the ‘real’ side of the coin when it comes to the two most popular meme tokens – Shiba Inu (SHIB) and Dogecoin (DOGE).
In 2021, the two coins became incredibly popular, with Dogecoin gaining more than 20,000% after Elon Musk’s appearance on Saturday Night Live as the “Dogefather”. Meanwhile, Shiba Inu recorded a lifetime gain of over 121,000,000% from midnight on January 1, 2021 to its all-time high set on October 27, 2021.
However, both coins have since dropped close to 90% from their peak. This trend is likely to continue in 2023 – payment coins are not special, and there are many digital currencies that can be used for payments. Furthermore, neither Shiba Inu nor Dogecoin offer anything that gives them a competitive advantage or differentiation, and their strong social media presence isn’t enough to make them stand out from projects that offer real-world utility.
History paints a grim picture for coins that skyrocket in such a short time too, with nearly all payment currencies that gained more than 20,000% in a short time span retracing between 93% to 99%. With this in mind, it’s likely that both SHIB and DOGE will lose half or more of their value in 2023.
3. Another Major Cryptocurrency Exchange Could Fail
It’s a prediction many won’t want to hear