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2022 was a difficult year for cryptocurrency, with a bear market leading to a decrease in both demand and value. However, the development of metaverse and blockchain-based apps is proceeding apace, which suggests the possibility of an increase in demand for crypto trends in the future.

This Halloween, we are predicting the top crypto trends that will shape your decisions in 2023. Will these trends provide a treat or a trick in the upcoming quarters? Read on to learn our verdict.

1. Tightening regulations

By 2022, there were a number of significant regulations imposed on the crypto market, particularly China prohibiting all crypto activities and the U.S. regulating some market components. Regulators have further started to scrutinize the DeFi sector. Analysts anticipate that regulations will have a substantial impact on the crypto world.

Regulators are taking steps to control the unpredictable nature of the cryptocurrency market. These measures are intended to reduce the harmful effects of a large sale and stop the use of digital currencies for illicit activities. They will also keep an eye on crypto traders. Even though regulatory statements may initially influence the cost of cryptocurrencies in an already unsteady market, the controls are necessary.

Our conclusion: It’s clear that regulations are typically a good thing for the industry. When regulations are in place, both investors and companies gain trust in bitcoin, leading to more stability. No matter what the price of bitcoin does in reaction to news of regulation, it’s important to keep in mind that these fluctuations are only temporary. This Halloween, remember that it takes time to get used to changes and there’s no need to be scared!

2. New generations of blockchain and crypto

We can observe the maturity of newer blockchain solutions of the third and fourth generations. For example, Aion, Cardano, and EOS are all platforms of the third generation of blockchain technology that have implemented sharding to reduce transaction fees and increase transaction speed.

Fourth-generation blockchains are designed to make trust easier to achieve. Platforms like Insolar and Aergo make it simpler to deploy business networks by concealing the intricacies of underlying blockchain technology. Not only do they make implementation easier, but they also recognize that not all consensus-based transactions are equal.

Our conclusion: The latest iterations of blockchain and cryptocurrency are designed to overcome speed and scalability issues. This will make it easier to set up, manage, and adjust enterprise networks. It’s wise to be prepared for a future where the concept of cryptocurrency is constantly evolving.

3. Greater interoperability in the offing

People who have utilized services and apps built on different blockchains and related platforms are familiar with the troubles this could cause. Investors necessitate multiple crypto wallets, and the transportation of resources from one blockchain system to another may need comprehensive knowledge. The same is true for funds that must be moved across layers – for instance, from the Ethereum blockchain (layer 1) to Polygon (layer 2).

Furthermore, Ethereum transactions are now extremely costly. Even when transferring a small amount of coins from Ethereum to a second-layer protocol, the associated transaction fees could range between $50 and $100.

Dispersing funds across multiple crypto apps and wallets can be inconvenient for users, leading to a negative user experience. MetaMask and similar services offer a wallet solution that allows users to access multiple blockchain systems and tiers from the same wallet. Zapper, another tool, is designed to track DeFi investments from a single place, regardless of the chain or layer where the funds are invested. Despite these advances, more bridge building is still required.

Our conclusion: Greater interoperability would be an excellent Halloween gift instead of a deception! Existing services are just beginning steps on the path to a connected crypto world, yet they are too weak to improve the challenges presented by multi-chain environments. Fortunately, a few large-scale initiatives have started to tackle the issue, like Polkadot’s Relay Chain framework.

4. Impact on the environment

As Bitcoin has increased in popularity, its environmental impact has come under scrutiny. The process of obtaining digital currencies such as Bitcoin, referred to as “mining,” requires powerful computers to solve complex mathematical equations. If these computers are not powered through renewable sources, they can generate a large amount of carbon emissions and contribute to the climate crisis.

An index from the University of Cambridge estimates that Bitcoin mining is consuming 0.5% of the world’s electricity, which is more than the energy used by Sweden in a year.

Our conclusion: The potential harm to the environment caused by cryptocurrency is a legitimate concern, prompting the emergence of “eco-friendly” blockchains that consume much less energy than those like Ethereum. We anticipate that this trend, along with governmental regulations, will bring about positive changes to the crypto industry in 2023.

5. The mainstreamization of DeFi

The decentralized finance (DeFi) applications on the blockchain enable people to execute conventional financial transactions without the need for conventional financial intermediaries. These transactions are typically facilitated via smart contracts, allowing people to complete financial transactions without relying on a third-party.

DeFi apps have grown in popularity among crypto enthusiasts, with conventional financial transactions being executed on the blockchain. These transactions are typically facilitated via smart contracts, meaning they don’t require third-party intermediaries. Examples of these transactions include lending and the development of derivatives, and the Total Value Locked (TVL) in DeFi apps has grown exponentially, from $2 billion in 2018 to $100 billion in 2021.

Our conclusion: DeFi represents an opportunity for economic growth in an uncertain financial climate, with yield farming being a popular example of this. Yield farming allows users to lend out their cryptocurrencies in exchange for interest or new cryptos, and has gained traction due to the higher yields they offer compared to traditional low-interest rates. Nonetheless, the long-term implications of this trend are yet to be seen.

As the current quarter draws to a close, it is important to take stock of current investments and the crypto industry as a whole, in order to make informed decisions about future crypto trends. Cryptocurrencies have established themselves as a major player in the Fintech space, and being aware of their influence is essential for success.