Coinbase has published a report with the 2022 results and also presented its forecasts for 2023. We have cited some theses from there to help any novice investor better navigate the new year.
This article is based on the 57-page “2023 Crypto Market Outlook” report from Coinbase, which is available as a PDF here. Here are some of the more general conclusions that follow from that report:
- Investors’ desire to accumulate altcoins has been hit hard by their capitalization collapse in 2022 and could take many months to fully recover.
- Therefore, the choice of digital assets for investment is expected to shift from exotics to higher quality names such as Bitcoin and Ethereum, based on factors such as sustainable tokenomics, maturity of the respective ecosystems, and relative market liquidity.
- Despite all the turbulence from the crypto winter of 2022, the crypto market is definitely alive and in the process of cleaning up speculative money and insolvent businesses. As this process is completed, the appeal of the crypto industry will only increase.
- The next growth cycle for digital assets will largely be driven by the development of standards and frameworks for regulated organizations. This is the normal stage of the industry adapting to all the experiences of 2022, and it will take some time.
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Although experts do not give clear answers on when crypto winter will end or exactly how much Bitcoin will be worth, they do predict some trends. Overall, Coinbase expects a gradual recovery of the crypto market in 2023.
Here are a few statements about individual crypto sectors.
- Bitcoin volatility is at historic lows, indicating that the market is stabilizing. The price is steady and outperforming most of the Top 10 Forex currency pairs. The industry is being cleared of players with weak risk management, and only the strongest of the miners remain as well. In 2023, Mt․Gox will most likely distribute 140,000 BTC, but this will not greatly affect the price; the current market is already large and quite capable of absorbing such amounts. Therefore, a market dump from this event is unlikely.
- Ethereum. Experts are still set on the growth of this asset, despite some failures with The Merge. The asset will become deflationary during the bull market, and when they open the withdrawal from the staking, the business model will become more transparent. Liquidity continues to flow into Layer-2 blockchains (Polygon, Arbitrum, Optimism) as more and more people realize that these networks are the future.
Now on their app they have a “Web3” tab which is an onboard for $ETH and the native dapps
Not sure @coinbase can be seen as neutral any longer 🤷♂️
— DomF ₳Σ (@CryptoDomF) January 1, 2023
- NFTs have a very exciting future; the current challenges are related to a very young market. Companies will continue implementing NFTs for online user engagement, rewards, and identity. NFT marketplace aggregators will solve the problem of low liquidity.
- Stablecoins have outlived their golden age in 2022 and will continue to grow. It is becoming clear that they are critical to the mass adoption of digital assets, with USDC and USDT among those remaining the most liquid stablecoins. The growing dominance of stablecoin’s market share confirms this asset type’s value and importance.
How to make money on it?
Traditionally, altcoins have been thought to grow faster, often without mentioning the downside of such growth — increased risks. A report shows that altcoin owners took impressive losses in 2022.
Therefore, we can recommend more cautious investments in the largest and best-known cryptocurrencies, which will significantly reduce your risks in 2023. Here, a renowned expert gives general advice on implementing this conservative strategy correctly.