During the first month of 2023, overall, the crypto market performed well. In particular, Bitcoin and altcoins in some categories demonstrated strong momentum, while Ethereum’s performance was slightly weaker. Despite that, some market expectations for the two mainstream cryptos in 2023 differ from their current growth status.
This year, Ethereum will probably become the highlight of the crypto market. Following the Merge in September 2022, Ethereum officially shifted to PoS and will implement the Shanghai Upgrade in March 2023, which will allow ETH stakers to redeem their withdrawal assets. Meanwhile, some investors are worried that the Shanghai Upgrade may impose selling pressure on ETH, which is also one of the reasons why BTC outperformed ETH during the latest market rebound.
It should be noted that the market has already witnessed the birth of stETH and BETH, which can now be traded in various secondary markets. Hence, ETH is unlikely to face any selling pressure. In addition, the unlocking and withdrawal of the Shanghai Upgrade will be carried out gradually, and it is estimated that over 50,000 ethers will be unlocked every day. Data from Beaconcha.in shows that the total ETH staked now stands at 16,280,361, accounting for about 13.11% of ETH’s circulating supply.
In late January, driven by Yuga Labs, the NFT market also started to recover. As the GAS fee rose, some ethers were burned. Although Ethereum Staking nodes managed to maintain an APY ranging from 4% to 8%, data from Ultrasound.money indicates that Ethereum’s annual deflation rate stands at 0.04%. This means that as the NFT market continues to thrive, the Ethereum supply is shrinking, which encourages investors to freely imagine the future of Ethereum.
After the Shanghai Upgrade in March 2023, Ethereum will activate four EIPs, i.e. EIP-3651, EIP-3855, EIP-3860, and EIP-4895. The proposals will speed up transactions for miners and improve the network’s performance to support Dapps with a larger user base. In addition, the upgrade will also introduce the stake withdrawal function. Soon after the Shanghai Upgrade, Ethereum may continue to implement the Cancun Upgrade in the second half of the year, which will, once implemented, slash L2 transaction fees.
In such a sluggish market, like the LSD category that recently boomed, Ethereum’s upgrades are also a rare market narrative. If no other crypto incident could deliver phenomenal profits in 2023, then Ethereum will provide major momentum for the whole market.
Let’s now turn to Bitcoin. Today, Bitcoin’s market share remains well above 40%. If the crypto fails to present the market with exciting new narratives, then the future growth of the BTC price will depend on the macroeconomic conditions of the world. There is still great news for Bitcoin: the Fed has slowed the pace of interest rate hikes, and geopolitical turmoil has continued. In addition, around April 2024, Bitcoin will go through another halving, a valuable market narrative for investors in a bear market. This year, cryptos facing imminent halving have scored brilliant growth. As such, Bitcoin’s future halving may also send the BTC price soaring in 2023.
Driven by the dual engines of Ethereum and Bitcoin, the crypto market could be very exciting for investors in 2023. Still, we might also witness even more trending crypto events such as the previous DeFi Summer, which may channel more funds into the market. As we are all part of the macro environment, no one could escape from the impact of market cycles. Therefore, investors should be extra careful when choosing projects and crypto trading platforms.
During the past few years, I’ve become a fan of CoinEx, a crypto exchange that has been running for five years under ViaBTC Group. What should be noted is that CoinEx is now available in 15 languages and offers 600+ premium cryptos and 1,000+ trading pairs covering categories that include DeFi, NFT, MEME, etc. Apart from that, the exchange also provides versatile services, spanning spot trading, futures trading, margin trading, AMM, and CoinEx Dock. To date, CoinEx has provided easy-to-use, convenient, secure, and efficient crypto trading services for over 4 million users in more than 200 countries and regions worldwide.
Disclaimer: No investment advice is provided in this article, and all data mentioned herein are for reference only. You should not rely on the information provided herein to make any investment decision, and you will be fully liable for your own investment decisions.
