Cryptocurrencies have brought hope and opportunity to unbanked and underbanked individuals worldwide.
However, they have their fair share of challenges as well. The volatility of digital currencies is one of them. As much as we would like to think otherwise, every day - and now even more so in the case of digital assets - is not necessarily a good day to invest in crypto.
This can be especially challenging for new investors who tend to take risks with their capital only when they feel it’s worthwhile. Even though this isn’t the ideal scenario for new investors, there are a few things you should know about emerging trends in cryptospace to remain informed about your investments and prepare accordingly. Let’s explore them further.
What are the Emerging Crypto Trends in 2023?
the blockchain economy expands
This is a result of several factors, from increased liquidity from established financial institutions entering the market to increased institutional adoption from the financial services sector. We expect more regulatory clarity, which will help increase investor confidence and make it easier for institutional investors to invest in the asset class. With more transparency in regulation, we might also see more crypto-based startups entering the market with innovative use cases.
Cryptocurrency Exchange Listing
For starters, they do not require a new blockchain to be built as they function on top of an existing blockchain. This makes them easier to adopt and implement. Additionally, exchange-based tokens can be listed on multiple exchanges, making them easily transferrable.
The major downside of exchange-based tokens is the risk of being delisted from the exchange. To safeguard against this, most exchanges require that listed tokens be actively trading on the exchange. If the token’s trading volume is low compared to its market cap, the exchange might decide to delist it.
Stablecoins
In the past few years, the cryptocurrency market has seen exponential growth in trading stablecoins. This is large because of the limitations of the existing cryptocurrencies when it comes to being used for global transactions.
The most common use case for stablecoins is to facilitate international payments with low fees and high reliability. In fact, there are now a number of decentralized exchanges that support trading in various stablecoins. While most of the stablecoins currently available in the market have been designed to solve the payment problem, they have one other advantage over cryptocurrencies - fiat currencies back them.
This means that they are extremely stable compared to other cryptocurrencies and fiat currencies, making them a safer investment option. Several factors are expected to drive the growth of the stablecoin market in the next few years. These include increasing demand for more stable assets, a rise in the number of institutional investors entering the market, and growth in the use of blockchain for regulatory purposes.
Decentralized Exchange
decentralized applications for decentralized exchanges
As opposed to centralized exchanges, where trading is done through a centralized server, the decentralized exchange does not rely on a centralized server for trading. Using a decentralized exchange, users don’t need to trust any third party or centralized server with their funds.
They can simply trade without any intermediaries. Moreover, decentralized exchanges have several other benefits over centralized exchanges. For example, they have low transaction fees, high liquidity, and are faster.
Bottom Line
The cryptocurrency market is expected to experience significant growth in the next few years. This growth is expected to be driven by the increasing adoption of blockchain technology, growth in the number of crypto investors, rise in the number of institutional investors entering the market and more regulatory clarity in the asset class. With these emerging trends in mind, you can better prepare yourself to thrive in the market and make the most of the next five years.
