Crypto – What Drives The Value? How It Will Perform 2023 ?

Value of Crypto is still something of a mystery.

Why number of Crypto is going up ?

The number of crypto is likely to keep growing , largely because it’s so easy to develop a new coin.

Which in basic terms is simply computer code generated by open-source software designed to transact value online.

Factors determining the value of Crypto ?

While it’s easy to confuse crypto with Bitcoin , there are actually around 4000 such currencies. That are in circulation around the world.

Furthermore, they are more than than the number of fiat (government -issued) currencies in existence.

Factors –

1. The way a coin is developed, and for what purpose , has a massive bearing on its value. While there are thousands in existence , the top 20 coins are believed to constitute around 99% of the market by volume.
2. Much like fiat currencies , the price of cryptocurrencies is heavily swayed by supply and demand. But its also determined by the cost of production.
3. Utility of the Coin is an important factor. Additionally, use of a coin is also one of the most important factor in a cryptocurrency value.

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Internal Drivers of the Price?

For example , for Bitcoin, that utility is solving the problem of wealth storage . Moreover, ethereum , the world’s second-largest cryptocurrency .

Further it can be used as the foundation for apps.

This compares to Dogecoin , which was created in just 2 hours as a joke. But it enjoyed a nearly 20% value boost when Musk tweeted : “one word Doge”.

Moreover, Doge does not pass some of the utility tests, the value comes from speculation.

It is important for you to note, that though Bitcoin acts a effective storage of value ,not all cryptos have a cap. Ethereum does not have, neither does Dogecoin.

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However, a cap is not the only way to hedge against inflation. Ethereum, for example , has a set number of monetary policies, including a fixed supply and issuance schedule. To keep its value constant.

As long as demand outweighs supply, its price will keep going up. Tether , one of the best-known stablecoins , is pegged to the US dollar to anchor its value.

External Drivers of Crypto Price ?

External factors also influence the value of a cryptocurrency . Additionally, the words or tweets of high-profile figures like Elon Musk .

Cryptocurrencies are still in their infancy. Furthermore, market caps tend to be relatively small.

What’s more this contributes to their volatility and makes them susceptible to the influence of individuals .

Further, the more big companies invest, the more individuals will find it hard to move the market.

Biggs also cites greater government clarity around crypto usage as a major driver in cryptocurrencies route. Further , to a more predictable value.

This works both ways , however. The national ban on cryptocurrency services by Chinese regulators in May sent bitcoin plummeting by close to 20% .

To say, Musk is the driver , probably gives him too much credit.

He definitely plays a part, but at the same time you have got the crackdown on bitcoin mining in China.

Additionally, in the US they are looking at new taxation for crypto profits.

Elon Musk may seem like a crypto market mover, but he is far from alone.

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How will Crypto Perform in 2023 ?

The Crypto industry is upbeat about its performance in 2023.

Equally, betting big on government rules and increasing awareness among the general public about its potential as a store of value.

After dealing a significant financial blow in 2022, the crypto industry hopes for a strong rebound this year.

Additionally, new regulations come into force , further, making the cryptocurrency space more secure .

Expected Crypto Market Trends in 2023 ?

The use of Central Bank Digital Currency (CBDCs) globally will usher in a new era of trade agreements .

Moreover, important, economic value creation , hardware manufacturing deals and bilateral relations.

It is also teaching you to have patience regarding your investments.

Trends – 2023

For 2023 end, rise in the market is expected as new regulations are coming to make crypto a more secure space.

Furthermore, rising interest rates and easing monetary stimulus will likely produce a tougher funding environment .

Which will narrow the field of potential investors that can win high strikes.

1. Increased Adoption

As more people become aware of cryptocurrencies and the technology that underlies them, further, the number of people using these assets are likely to grow.

It could lead to increased adoption by businesses and individuals. Which could drive the demand for cryptocurrencies.

2. Greater Regulatory Clarity

Cryptocurrency sector will continue to grow and mature . Furthermore, regulatory bodies worldwide will likely provide greater clarity and guidance.

Moreover, there will be a policy on how these assets should be treated . Further , this could help to build confidence in the market and encourage greater adoption.

3. Improved Infrastructure

The Infrastructure surrounding cryptocurrencies , such as exchanges , wallets, and payment processors. Equally, it will improve and become more user- friendly .

This could make it easier for people to buy, sell and use cryptocurrencies in their daily lives.

4. Taxation

The advocacy to promote crypto projects and boost adoption to create a self-reliant crypto industry in various countries will be initiated.

5. Institutional Crypto Investment

The momentum of institutional Investment in crypto assets is expected to continue for a while.

The market will likely to have increased liquidity and the popularity of crypto assets further as a store of value.

However, the average funding value is expected to follow a similar trend of 2022.

With only the most promising projects with market viability , again, getting supported by investors after careful consideration.

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Progress of Web 3 in 2023

Leon Foong, head of APAC , Binance , a global crypto exchange , said the Web 3 infrastructure will continue to grow. Additionally, it will draw investors’ attention.

To build a robust Web 3 infrastructure , security is very important.

And then, Binance’s plans to continue with initiatives such as “Global Law Enforcement Training Program” .

By disclosing Binance’s hot and cold wallet addresses through Proof of Reserves , and further establishing the Industry Recovery Initiative (IRI) .

For protection of consumers and to rebuild the industry.

Conclusion

Despite their original promise, cryptocurrencies have not acted as hedges against inflation. Moreover, they have trended with broader indexes.

In the midst of this economic uncertainty, one sector that could potentially benefit from a weaker US dollar is the cryptocurrency market.

Token Metrics Analysis

According to Bill Noble, Chief Technical Analyst at Token Metrics, “a weak dollar is a dream scenario for crypto.”

He explains that bitcoin and other cryptocurrencies “are a legitimate component of the foreign exchange market, and it’s like any other currency. It rises as the dollar falls.”

Meanwhile, economic data came in today that the U.S. economy grew at 2.9% in Q4 of 2022.

What’s more, it was slightly ahead of the 2.8% expectation.

Bottom Line …..

Digital asset investments are extremely volatile. Finally, stay protected by learning when it’s time to sell, cut losses or capture profits .

Second prepare to profit if the crypto starts to rebound.

FAQs

5 best Long-term cryptos.

a. Bitcoin

b. Ethereum

c. Cardano

d. Polkadot

e. Chainlink

Bitcoin is one of the many crypto’s expected to boom in 2030. It has a potential to attain a price of $1 million per coin .

This represents a % increase of 5,000% from the July 2022 price.

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Polkadot

Cardano

Solana

Tether

Binance Coin

Ripple’s XRP

Dogecoin

Shiba Inu

Litecoin (LTC), Cardano (ADA), Binance (BNB), Polkadot (DOT)

Bitcoin is the original and still most widely used . It is also the most stable , compared to other currencies.

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