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In the first month of 2023, the crypto market performed well overall. Bitcoin and altcoins in particular showed strong momentum in several categories, while Ethereum’s performance was slightly weaker. However, some market forecasts for the two mainstream cryptocurrencies in 2023 differ from their current growth status.
This year, Ethereum is probably the highlight of the crypto market. After a merger in September 2022, Ethereum has officially moved to the trading center and will be upgraded to Shanghai in March 2023, allowing ETH holders to withdraw their pledged assets.
However, some investors are concerned that the Shanghai upgrade could put selling pressure on ETH, which is one of the reasons why BTC outperformed ETH during the recent market rally.
It should be noted that the market has already seen stETH and BETH, which can now be traded on various secondary markets. So ETH is unlikely to come under selling pressure. In addition, the release and disbursement will be phased in during Shanghai’s upgrade.
It is estimated that more than 50,000 ethers are released daily. Data from Beaconcha.in shows that the total number of ETH in question is currently 16,280,361, which is about 13.11% of the ETH in circulation.
In late January, the NFT market also began to recover, led by Yuga Labs. As the GAS fee increased, some ether was burned. While Ethereum staking nodes are able to hold an APY between 4 and 8 percent, data from Ultrasound.money shows that Ethereum’s annual deflation rate is 0.04 percent.
This means that the supply of Ethereum is shrinking while the NFT market continues to thrive. This encourages investors to think freely about the future of Ethereum.
After the Shanghai upgrade in March 2023, Ethereum will activate four EIPs, namely EIP-3651, EIP-3855, EIP-3860 and EIP-4895. These recommendations will speed up transactions for miners and improve network performance to support DApps with a larger user base.
The upgrade will also introduce the feature to withdraw staked ETH. Shortly after the Shanghai upgrade, in the second half of the year, Ethereum may implement the Cancun upgrade which, when implemented, will reduce L2 transaction fees.
In a market as sluggish as the LSD category, which has recently boomed, Ethereum’s upgrade is also a rare market occurrence. If no other crypto event can deliver great gains in 2023, Ethereum will provide a big boost to the entire market.
Let’s turn now to Bitcoin. Today, Bitcoin’s market share is still well over 40 percent. If the cryptocurrency fails to present new exciting stories to the market, future BTC price growth will depend on world macroeconomic conditions.
There is still good news for Bitcoin: the pace of rate hikes by the US Federal Reserve has slowed and geopolitical turmoil continues. Additionally, Bitcoin will halve again around April 2024, valuable market news for investors in a bear market.
This year, cryptocurrencies have seen a phenomenal growth that is about to halve. Therefore, the future spread of Bitcoin may increase the price of BTC in 2023.
Driven by the two driving forces of Ethereum and Bitcoin, the crypto market could be quite exciting for investors in 2023. However, we could also see more crypto events like last summer’s DeFi could inject additional funds into the market. As we are all part of the macroeconomic environment, no one can escape the impact of market cycles. Therefore, investors should be extremely careful when choosing crypto projects and trading platforms.
For the past few years, I have been a fan of CoinEx, a cryptocurrency exchange run by ViaBTC Group for the past five years. CoinEx is now available in 15 languages and offers 600+ premium cryptocurrencies and 1,000+ trading pairs in categories like DeFi, NFT, MEME, etc.
Besides, the exchange also offers versatile services including 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 to more than 4 million users in more than 200 countries and regions around the world.
Disclaimer: This article does not constitute investment advice and all information contained herein is for reference only. You should not rely on the information provided here to make any investment decision and you are solely responsible for your own investment decisions.
Last updated on February 6, 2023
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