Since the invention of Bitcoin the cryptocurrency market has continued to show robust trends illustrating an industry that is ever undergoing evolution and innovation. It’s been fourteen years since Satoshi Nakamoto introduced Bitcoin to the world. If you have been in the crypto space even for the last 6 years a lot has happened. For example, following the inception of Bitcoin another cryptocurrency ushered a new era in the ecosystem and this was the development of Ethereum network and its respective coin known as Ether (ETH) in the year 2015. Thereafter, new coins and tokens emerged out of the Ethereum blockchain through the process of Initial Coin Offerings and Security Token Offerings (ICOs and STOs respectively). Other remarkable trends include the eruption and growth of Decentralized finance (DeFi), non-fungible tokens segment becoming a hot crypto trend and its boom.
Noteworthy, in all these developments some of the hawk eyed crypto investors made huge profits out of their crypto investments. Hence, Coinsbtm is analyzing in this article the most probable hot cryptocurrency trends in 2023 that enthusiasts should watch out in coming months.
Expansion of DeFi Use Cases
Decentralized finance commonly known as DeFi refers to the application of blockchain technology across financial products and services and bypassing traditional finance intermediaries such as the banks or insurance firms. In the crypto market already the DeFi segment continues to experience impressive growth through DeFi platforms that offer financial products or services such as trading, lending and borrowing.
Ease of accessibility associated with DeFi platforms has been a major driver to the uptake of these products and services. At the inception of DeFi platforms a user had to be highly skilled and possess technical expertise to be able to interact with products and services within the DeFi space. However, DeFi platforms are becoming user friendly and it’s easier for an average person to engage and interact with the platforms.
Further, there has been a surge in demand of DeFi products and services among users who are seeking an alternative to the near collapsing traditional finance (TradFi). Consumers of TradFi have realized the present systems in the conventional financial systems are expensive, slow in transaction times and vulnerable to censorship by the intermediaries and government agencies. Contrastingly, DeFi platforms offer more level of transparency, it is cost- friendly and highly efficient and this is what will likely spiral the demand in coming months.
Ballooning of NFTs Ecosystem
Non-fungible tokens (NFTs) are digital assets created using blockchain technology and are unique meaning they cannot be exchanged for another identical asset. The first NFT was Quantum created in 2014 by Kevin McCoy. However, NFTs gained popularity in 2017 with the growth of the Ethereum network. In 2021, NFTs ballooned with sales over $800 million and this is expected to continue to grow especially with the application of NFTs within the collectibles and arts industries.
A major driver of the NFTs boom lies in their ability to verify authenticity and ownership of digital items.
Additionally, NFTs will reduce counterfeits and theft experienced among digital assets. The NFT solution to these problems lies in the adoption of blockchain technology as the it’s possible to carry out verification on a blockchain network. Artists and collectors will drive the uptake of NFTs owing to the ability of creating new revenue streams something that has been lacking in the creatives economy.
Eruption of More Privacy Coins
Privacy coins are cryptocurrencies built with privacy of the user as the key concern. Presently, examples of privacy coins include Monero and Zcash. Users are increasingly wary of their transaction details and privacy of data hence, in 2023, a surge in demand of privacy coins is expected to increase.
An additional driver leading to increased demand of privacy coins is the recent crackdown on cryptocurrencies transaction by law enforcement agencies. Consequently, crypto users viewing cryptocurrencies as a source of the much needed privacy especially in online transaction will result to finding more private and secure cryptocurrencies to use in their transactions.
Introduction of Central Bank Digital Currencies
Central banks are researching on how to leverage on blockchain technology and application of cryptography to the global financial system. Evidently, huge progress continues to emerge in their efforts and different nation’s central banks are exploring ways of introducing their own digital currencies known as as Central Bank Digital Currency (CBDC).
Even though cryptocurrency die hards are against the introduction of CBDCs there are certain apparent benefits of this special digital currency. Research has shown CBDCs would be cheaper and faster owing to the fact central banks will leverage on blockchain technology. Additionally, CBDCs have the potential of bringing more stability to the financial system with the regulators being able to track visibility and control money supply.
Central banks such as the European Central Bank and the People’s Bank of China are keen and in the process of developing their own CBDCs with other nations likely to follow suit.
