After a bear crypto market during the second half of 2022, 2023 started with a slight recovery, exemplified with Bitcoin reaching $30,000, the highest value since June last year. With the prospect of improvement, investors will propably look for new currencies to diversify their assets. There is, then, no better time than now to explore some of the most promising cryptocurrencies of the year.
2022 was a year marked by stock drops. Of course, it was hard to expect anything different, considering the all-time highs reached by the crypto market between 2020 and 2021, when the pandemic pushed people to focus on digital investments, leaving the market in full swing. Thus, once the pandemic and the need for isolation were overcome, investments decreased and 2022 was already predicted to be a year of monetary correction.
However, this was not the only factor that influenced the drop in values. One of the main factors was the bankruptcy of the large Bahamian exchange FTX, following discoveries of corruption, fraud and mismanagement. With that, several investors sold their shares, and caused the company’s token to plummet. From this, many users began to withdraw their assets from the exchange, which caused the company to freeze withdrawals and transfers, which created a liquidity crisis. It was with this that Bitcoin reached its lowest value in two years, $15,700, on November 9th.
Some other factors in the global economy also had a part, including the worsening of the economic scenario with a major downturn in the main world economies, which led to a rise in interest rates, something that always makes fixed income more attractive. Along with this, there was also the beginning of the conflict between Russia and Ukraine, which also hindered the world economy.
Finally, there were still some issues within the crypto market, such as a drop in interest in the play-to-earn gaming market, in addition to the transition from the Ethereum network to the Proof of Stake model. The latter promises to improve many crypto-related issues, such as a more sustainable use of energy, but like any major change, it ends up making investors cautious.
2023 arrives to reheat the market
With all these problems hitting cryptocurrencies, the most impatient ones were already starting to discredit them. However, showing that the crypto world is here to stay, the year 2023 has already started with a rise in values. Those who took advantage of the end of 2022 to buy Bitcoins at its lowest did well, as by mid-January the value of the currency had already returned to $20,000, where it would remain stable with slight increases until March when it advanced to $30,000.
Other than that, cryptocurrencies also got help from the US banking crisis. The various problems that occurred in American banks created fear and lack of confidence of the population in these institutions, which led many to seek alternatives to keep their assets. The main alternatives were cryptocurrencies, which rose in value with the event.
Thus, this year presents itself with a promise of maturation of the crypto market, with a focus on stabilization after the previous period of decline. One of the biggest predicted potentials is the improvement in the scalability of blockchains, to avoid overloads, increase capacity and streamline processes. This should come with the implementation of layer-2 solutions that some promising cryptocurrencies are already bringing into their networks.
In addition, a sector that promises to stand out is decentralized finance, the so-called DeFi, due to the automation of its smart contracts. With them, it is possible to carry out all types of financial applications without even needing an account, in a transparent and auditable way.
Finally, the reformulation of NFT games as play-and-earn has brought more focus on fun and made them much more attractive to players. In this way, games of different genres have emerged with a lot of investment potential.
Of course, even if these four months of 2023 point to a reheating of the market, it is always good to remember that any investment must be made with great caution and research. The financial market can be very unpredictable, and therefore should not be treated as child’s play.
What are the 5 most promising cryptocurrencies?
With this favorable start to the year, it is normal for many people to wonder which cryptocurrencies to invest in 2023. To help, let’s analyze 5 of those that promise to be strong candidates for good investments.
Ethereum: One of the leading coins and blockchain platforms for quite some time now, Ethereum still has great appreciation potential. This is because it was the first blockchain to make smart contracts available, and its success in transitioning to the Proof of Stake model that brings more sustainability to energy use should increasingly be a great attraction. The network is also often the first choice for Web3 developers and has over $30 billion worth of dApps running on it. Since its creation in 2016, the currency has grown by more than 43,000%. It also ended up suffering sharp declines in 2022, reaching a low of $1,000, but it is already recovering and in April 2023 its value doubled, reaching $2,120.
Bitcoin: Of course, the pioneering cryptocurrency could not be missing, after all, for many people, Bitcoin is still synonymous with cryptocurrencies. With over 40% Market Share, it is seen as the safest investment in crypto, even if its investment returns may not be as high anymore. Like Ethereum, Bitcoin also has its own blockchain platform, and its widespread use ensures the security and stability of the network. It is also the most accepted currency in online transactions. Its appreciation was astronomical, as until 2016, a Bitcoin was still worth $500, and is currently quoted at $29,300, having reached more than $60,000 in 2021.
Cardano: A promising competitor to Ethereum for also enabling smart contracts and dApps on its blockchain platform, Cardano stood out as an early adopter of the Proof of Stake method. Its good scalability and ease of development has attracted developers to its network. One of the parts that draws attention is that the value of its coin is still low, which presents a great opportunity for gains for its investors.
Solana: Developed with a focus on DeFi and dApps, Solana’s platform works in a hybrid way between Proof of Stake and Proof of History, something quite unique. Also presenting itself as a competitor to the Ethereum platform, Solana has been betting on a greater focus on the development of applications for mobile phones. With very low transaction fees, the Solana cryptocurrency has already appreciated by around 2,600% in just 3 years of existence.
Binance Coin: Cryptocurrency from Binance, one of the largest in the world. Initially, it served to facilitate transactions on Binance, but it has since evolved and can be used for many other things, even travel bookings. In 2017, its value was just $0.10, but currently it has reached $331, a gain of 330,000%.
Read more about cryptocurrencies:
- What’s the best way to sell Bitcoins and convert them into dollars?
- Everything you need to know about Satoshi cryptocurrency
- Virtual workers: What is Bitcoin mining?
Which cryptocurrency will explode in 2023?
Of course, many people are too impatient for these long-term investments, so they look for the next cryptocurrency to explode. We would all love to discover the new Bitcoin and absurdly multiply our investments in a short time, but the reality is that this is not something that can be predicted.
Still, there are some recent cryptocurrencies that have been doing well, and perhaps could see their values rise significantly in the near future. As always, caution is encouraged, and to that end a look at some of the leading candidates follows.
Polygon: Formerly known as Matic Network, Polygon has seen tremendous growth since its inception in 2017, with an increase of 36,000%. With a large record processing capacity, its network has low rates and is able to execute projects with a lot of movement. It has two layers that work in parallel, one focused on security and the other on execution. The Polygon network already has over 7,000 dApps and includes major projects such as the Aave lending protocol and the NFT game The Sandbox.
XRP: Cryptocurrency created for the blockchain payments protocol Ripple, which allows fast and cheap transactions, already used by hundreds of financial institutions. The currency went through a low period after some legal processes that emerged in 2020, but with them coming to an end soon, it promises to return with a lot more strength to the market.
Immutable X: Using a secondary layer of the Ethereum protocol, the Immutable X cryptocurrency has a network aimed at the NFT gaming industry, seeking to minimize the cost of its NFT transactions. Already used in successful games like the card game Gods Unchained, and with integration in highly anticipated games like Guild of Guardians, Immutable X facilitates the use of NFTs by developers, with security and speed. With the growing strength of play-and-earn games, this should be a good investment bet.
Apecoin: Virtually everyone who has heard of NFTs knows about the Bored Ape Yacht Club. This is because the monkeys have become synonymous with the popularization of NFTs, with their numerous images of unique apes being sold for exorbitant amounts, even allowing their owners to participate in galas with celebrities. Now, the Bored Apes metaverse project called Otherside is about to be released, which has already raised more than $280 million in land sales. With that, Apecoin will be the official currency of this metaverse, and promises good appreciation.
Dogecoin: The coin started as a joke in 2013, referring to the popular Shiba Inu dog meme. However, with the dedication of the meme community, it has evolved into a strong cryptocurrency, with an appreciation of over 40,000% since 2017. What helps the coin a lot is also its endorsement by well-known entrepreneur Elon Musk, who has already caused strong rises in the currency just by quoting it. His strong prominence in the public sphere after buying Twitter represents more potential for currency appreciation, but a new project called AiDoge that promises to combine artificial intelligence with memes shows even more chances for growth.
TARO: Coin of Robotera, new NFT game that is in resource pre-sale phase and will allow players to develop and explore their lands and own unique robots that can be traded as NFTs. Currently, the in-game currency is worth $0.020 and it has already raised more than $1 million in the first pre-sale phase. Once the second phase starts, its value will be increased to $0.0225. If the project really works out, this could be a good form of investment.
Beware of the hype!
As already mentioned, many people enter the crypto market eager to make big profits in a short time, looking for coins that can explode in value quickly. That’s why many scammers take advantage of these people, promising everything possible, without ever being able to deliver such promises.
The best ways to identify this type of cryptocurrency is to see if there is a lot of hype and promise on the part of the developers, without having any real evidence that they bring innovations and qualities to fulfill such promises. A classic element of scamming cryptocurrencies are absurd highs right after their launch, something that happens with the manipulation of values with their circulation in the hands of false investors, and their value soon collapses after they sell.
The teams behind scamming cryptocurrencies are also often completely unknown, which is why it is important to make sure who is behind what you are going to invest. In this case, it even applies to cases where there is no scam, but only inexperienced teams that believe they will be able to develop new valued coins but end up stumbling due to their inexperience.
In this way, it is once again reiterated how essential research and caution are when it comes to investing in cryptocurrencies. This is a very volatile market that can present both gains and losses from one hour to the next, and the maturity to deal with it, not despairing with instability, knowing how to diversify the portfolio, and understanding which cryptocurrencies are promising are the basic requirements for the success.
Translation by Laura Bonci
