The most promising cryptocurrencies for 2023, according to analysts

2022 began with frustration that Bitcoin (BTC) failed to hit $100,000 as some had hoped, and ended with investors catching themselves complaining “with full bellies”: from $47,000 as of Jan. 1, the cryptocurrency touched $15,500 in November and ended the period at $16,547, according to data from aggregator CoinMarketCap, a cumulative decline of about 65% over 12 months.

Analysts expect 2023 to remain challenging for risk assets like cryptocurrencies, but that the market bottom may be closer than expected. The idea is that, despite the bad times in the industry, blockchain technology has proven its usefulness as a means of eliminating the middlemen and its adoption should favor assets that rotate in this environment, and which will eventually receive part of the capital stopped in fixed income.

“Raising interest rates is very expensive for countries and can lead to a recession that nobody wants to happen. So there is no such thing as an infinite rise in interest rates,” assesses Helena Margarido, co-founder of Monett and director of operations at Kodo Assets. “People will look at inflation and how much fixed income makes, they will see that the account does not close (Brazil is an exception), and they will have to migrate at least part of their investments, go back to risking variable income, in cryptoassets”.

However, the sentiment is still one of caution as to when this recovery actually happens. The projections of the experts for this year are, for the moment, more in turmoil in the sector, especially in the first half of the year. “We will have a very strong first half in the market decline,” says trader Vinícius Terranova, noting that, in 2022, metrics widely used to analyze cryptocurrencies plummeted after BTC plunged below its 2017 high.

Fernando Pereira, chart analyst at Bitget, recalls that crises such as the one caused by the FTX bankruptcy intensified Bitcoin’s losses over the year, directly affecting a performance that, in his opinion, could not have been so negative.

In view of this, the analysts interviewed by the Money info I believe that not only will Bitcoin return to investor attention throughout 2023, but there are at least three other cryptocurrencies that can be considered promising choices to invest in for long-term appreciation.

1.Bitcoins (BTC)

Despite being criticized for not offering the same utility as Ethereum, analysts still point out that Bitcoin should be in the portfolio of risk-averse investors in 2023. Even taking into account the challenging macroeconomic backdrop, the cryptocurrency’s fall is seen as too steep and therefore, it should reverse faster when the market perceives the slightest sign of a change in interest rate policy in the US.

The first half of 2023 should present a good opportunity to return to exposure to the asset, assesses trader Fernando Pereira, of Bitget. “We see a clear bearish pivot formation [no gráfico do Bitcoin]but oversold indicators indicate that the downturn is nearing its end,” he explains.

For both him and Terranova, Bitcoin’s low, which is expected to arrive in the first half of the year, could be around $12,000 or, lower, in the $9,000 to $10,000 range – from which a rapid recovery is expected .

It is precisely pessimism, warns Pereira, that supports the thesis of a recovery of BTC sooner than many expect. “The variable income market usually bottoms out before the worst macro scenario and starts pricing in a reversal [com antecedência]. I think this time will be no different.

Read also: Discover the history of Bitcoin, the world’s first cryptocurrency

2. Ethereum (ETH)

“Ethereum is the most obvious buy in the entire crypto market,” notes Helena Margarido, of Monett and Kodo Assets. “The Merge (Merger, in English) was not small and caused a triple halve (emissions cut). This, added to the token burning policy that has arrived since 2021, has caused Ethereum to end 2022 as a deflationary asset, with less ETH in circulation than at the beginning of the year. In terms of expected appreciation, this is very high,” he explains.

For the specialist, the number of solutions developed in Ethereum continues to grow, also because would-be rivals have not caught on – such as Cardano (ADA), which is struggling to attract users, and Solana (SOL), which has gone through several failures in 2022 and however, it closed the year with the unwinding of prices due to the connection with FTX. “Everything relevant in cryptocurrencies is built on Ethereum,” says Margarido.

The sweet spot for buying ETH is not yet clear given the conditions on the charts. Trader Fernando Pereira points out that, for now, the cryptocurrency tries to hit a higher low than its predecessor, but has yet to hit a higher high before showing a reversal.

Terranova, which also has ETH in its portfolio, is still betting on the correlation with Bitcoin: it will move heavily to other cryptocurrencies, including ETH, only when the main digital asset on the market shows the beginning of a sustained recovery.

Read also: Discover the history of Ethereum, the second largest cryptocurrency in the world

3. Polygon (MATIC)

The thesis that Ethereum will remain relevant in 2023 brings with it the possibility of token earnings from so-called second-level networks, which help lighten the ETH blockchain during peak usage periods.

The leading exponent of this category is Polygon (MATIC), which offers fast and cheap transactions, compatibility with Ethereum and is still experimenting with advanced encryption technologies, such as zero knowledge proofs (zero-knowledge proof).

While it still has usability issues, Polygon has become the choice of many companies (like Nubank and Starbucks) for issuing tokens and launching Web3 projects in general, over competitors like Solana, Celo, and Cardano.

“If you look at what Polygon is already offering, despite past problems, it’s also an obvious choice. [para investimento em 2023] because it tends to sustain itself over time,” explains Helena, from Kodo. “Ethereum will not work alone, there will always be smaller transactions that require very low transaction costs that Ethereum is unlikely to be able to deliver.”

Polygon’s MATIC token was also one of the least abandoned in 2022, Terranova points out, suggesting its rise could be stronger in a market reversal scenario. Bitget’s Pereira says the asset’s chart has already shown signs that the price may start an early recovery, showing that “the buying pressure has come before it, and not in other currencies.”

“MATIC is one of the projects that could stand out in the short term after the turnaround,” says Pereira.

4. Chain Ring (LINK)

Another cryptocurrency that is on the radar of analysts polled by Money info it is LINK, of the Chainlink project, which reigns alone in the oracle segment, offering decentralized and trusted repositories to offer data to blockchain projects.

“Because of all that happened with FTX, on-chain data projects, like oracles, will be more important because they carry the information that will be used in decentralized brokerages,” plans trader and investor Vinícius Terranova.

“The data provided by Chainlink is used by everyone, it is a very useful project. Has the currency suffered? He suffered, but that’s exactly why he’s interesting”, he evaluates.

The COO of Kodo Assets has been betting on Chainlink practically since the project was born. “Chainlink’s case is so obvious that I recommended it in 2017, when it was worth pennies, and there were people who invested $50,000 and became ‘trillhard’, because it hit $54 at its 2021 peak,” he says. Margarido. . “There were people who retired during the pandemic.”

In 2023, says Margarido, Chainlink remains promising because the company, after solving the problem of accessing data via smart contracts, started working with interoperability between blockchains, which has proved to be a crucial problem to solve in the ‘last year. .

“Besides the fundamentalist issue, Chainlink is an obvious choice because it solves a lot of problems that no one else is solving,” says the director of Kodo. For her, the LINK token, which functions as a sort of license to use the data provided by Chainlink, is one of the few cases of utility tokens (or utility tokens) which is moving towards its valorisation as its use grows.

To the specialist, LINK would be like a valuable software license that is priced well below the market, such as, for example, an AutoCad license, which costs BRL 8,000 a year, but is “on sale” for BRL 30.

Read also: What is Chainlink and how it works

honorable mentions

In addition to the aforementioned cryptocurrencies, analysts recommend keeping an eye out for the following assets as potential good additions to your portfolio throughout 2023: All make up Vinícius Terranova’s portfolio, with the exception of The Graph, recommended by Bitget’s Fernando Pereira.

• The graph (GRT): Like Chainlink, it slots into crypto data projects and offers open APIs for DeFi projects
• Cosmos (ATOM): pioneering interoperability project, allows you to host entire blockchains with your own native currencies
• Binance Coin (BNB): Native coin of BNB Chain and the Binance exchange, has a growing number of use cases, including participation in the first rounds of token purchases
• Avalanche (AVAX): Rival Ethereum with lauded technology, offering different versions of blockchain depending on the use case of the project to be developed
• Optimism (OP): Just like Polygon, it is a second-level project known for its ease of use, which aims to make transactions on Ethereum faster and cheaper
• Hail (AAVE): Decentralized Finance Protocol That Sailed Well and Survived the Cryptocurrency Winter of 2022 – Runs on Ethereum
• Curve (CRV): Decentralized broker for stablecoins, allows you to earn income on top of this type of asset
• GMX (GMX): Decentralized derivatives exchange known for passing platform earnings to native token holders (crypto dividends)

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