The significant growth of digital currencies compared to other financial markets, which are more stable and secure, caused people to move their capital from other markets to this market. But this market is not very attractive in 2022 and digital currencies experienced a sharp fall this year. For this reason, most of the fundamental investors and those who entered the digital currency market during this year experienced heavy losses. Nevertheless, many experts believe that with the beginning of 2023, the downward trend of the digital currency market has ended and we will witness the beginning of a positive season for this market. To fully learn these concepts, we suggest you participate in the digital currency course of Rahvard Academy.

With what has been said, the question arises, which digital currencies are suitable for investment in 2023? In the following, we will try to introduce the digital currencies that have a high growth potential in 2023 by examining the reasons for the fall of the crypto market.

The reason for the fall of the digital currency market in 2022

In 2022, the price of digital currencies fell sharply, leading to a 60% decrease in the market cap of the entire cryptocurrency market. Many reasons were involved in this incident. Among these reasons, we can mention the downward trend of Bitcoin due to the collapse of the FTX exchange, the fourth digital currency exchange in the world. In fact, the main reason for the collapse of the FTX exchange was the collapse of the Terra network and the algorithmic stablecoin of this network, i.e. UST. As you know, the price of altcoins is affected by  the price of Bitcoin  ; For this reason, the fall of Bitcoin affected the entire cryptocurrency market and the market experienced a significant fall.

In addition, political and economic factors at the macro level also affected this market and caused the market to fall. The most important of them are the following:

• The introduction of new laws and prohibitions by some governments in order to control the digital currency market, such as the ban on Bitcoin mining in China or the taxation of digital currencies in India.
• The war between Russia and Ukraine
• The emergence of inflation in Europe and America and the determination of contractionary policies
• …

Considering these rules and restrictions, it is expected that investors will be inclined towards digital currencies with more privacy so that if these restrictions continue, there will be no risk to their capital. On the other hand, native tokens of exchanges can be an attractive option for investors due to their lower depreciation compared to other cryptocurrencies.

The content of this article should not be considered as a decision criterion for investment. You should research and obtain information in that field before any investment. Rahvard website will not be responsible for your possible losses.

Bitcoin

Perhaps many investors have doubts about the fundamental nature of Bitcoin after its sharp fall in 2022. But don’t doubt that Bitcoin, as the king of cryptocurrencies, has been the most stable and secure in recent years. Looking at Bitcoin’s history, you will realize that this cryptocurrency is fully capable of recouping its lost value. For this reason, we can be optimistic about the future of this cryptocurrency in 2023. Note that the requirement for a successful investment is to have a diverse portfolio of short-term, medium-term and long-term assets.

It can be said with certainty that Bitcoin is one of the best medium or long-term investment options that can recover its lost value in the meantime. On the other hand, it can be said that almost all cryptocurrency market investors around the world pay special attention to Bitcoin. So Bitcoin is a promising cryptocurrency with a strong support, which is very unlikely to fall compared to other cryptocurrencies. If one day cryptocurrencies become ubiquitous for everyday payments around the world, Bitcoin is definitely one of the first choices.

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Ethereum

Ethereum is the second digital currency in the cryptocurrency market, which has the highest market value after Bitcoin. This network is known as the main host of projects in the field of DeFi, Metaverse and other smart contracts. In fact, Ethereum was the first blockchain network that provided the ability to execute smart contracts.

Another noteworthy point regarding Ethereum is the update of this cryptocurrency to Ethereum 2.0 in 2022. This project, which is also called Ethereum Marj, tried to solve the scalability problem of the Ethereum network by changing the consensus algorithm of Proof of Work to Proof of Stake. Increasing the scalability of the network has led to an increase in the speed of transaction processing and thus a decrease in the network fee. As the speed of the network increases, it is expected that more decentralized applications will run on this network. In fact, investment in Ethereum network projects will increase and this will lead to an increase in the value of this cryptocurrency.

The use of the proof-of-stake algorithm has reduced energy consumption in the network and its destructive effects.. On the other hand, following this update, the supply of “Ether” coin in the network has decreased significantly, and most likely, with the increase in demand, the price of this cryptocurrency will increase.

Binance Coin

Binance Coin, the exclusive token of Binance Exchange, is the largest centralized digital currency exchange, which is used to pay fees in this exchange. For this reason, the performance of this cryptocurrency is strongly influenced by the status of this exchange. In case of any problems for this exchange, the price of this token will decrease. But considering that this exchange is still ranked first among digital currency exchanges, Binance Coin will continue on its way.

As you know, Binance Smart China is an Ethereum alternative network for hosting DeFi projects launched by Binance exchange. BNB token is used to execute smart contracts and other decentralized programs in this network. The high speed and low fees of this network have made it one of the most prominent networks today.

The implementation of the automatic token burning policy in the Binance exchange has caused a number of BNB tokens, equivalent to a certain amount of the profit of the Binance exchange, to be burned once every three months. Over time, the decrease in the number of tokens can affect their price.

The discount in paying Binance exchange fees using the BNB token, the cost-effectiveness of using Binance China’s smart network for the implementation of smart contracts and decentralized programs, are other influential factors in the growth of the price of this cryptocurrency.

Statistics show that in the crypto winter, this cryptocurrency showed good resistance and was among the currencies that did not suffer a severe decline. Therefore, it can be said that BNB is one of the best investment options in 2023.

Cardano

Kardanew As a third-generation cryptocurrency, it was launched in 2017. This cryptocurrency uses a proof-of-stake algorithm to process transactions and has high scalability. For this reason, it is known as the main competitor of Bitcoin and Ethereum networks, which have limited processing power.

The high speed of transactions in this network has made it possible to transfer digital assets around the world in the fastest time and at the lowest cost. Also, due to its structure, this network has been able to be a powerful host for DeFi projects. It is expected that in 2023, the DeFi field of this network will grow significantly. Currently, the Cardano network is in the fourth stage of its five-stage evolution. This phase is called “Basho” and with an emphasis on scalability, it tries to improve the performance of the Cardano network to accommodate higher volume applications.

In 2023, Cardano will release algorithmic stablecoins that will reach their highest price in 2023 if market conditions improve.

China Link

As you know, oracles are a mechanism that provides the external data required for smart contracts. Therefore, Oracles are one of the basic needs of the DeFi field. Chainlink is one of the most reliable and low-risk oracles that has been adopted by many blockchain networks.

This network has recently released its second version under the name of China Link 2. In this version, Chinalink has taken a big step towards smart contracts and is trying to add staking functionality to this version in the future. At present, Chinalink controls more than 60% of the decentralized market of oracles. In fact, Chainlink plays a similar role in the market of oracles as Bitcoin in the market of cryptocurrencies. Considering that most of the networks use Oracle China Link for their smart contracts, the probability of losing the dominance of this oracle on the decentralized market of oracles is very low. The capabilities of China Link in the field of smart contracts, decentralized applications and Web 3 and the support of powerful partnerships of this network have made this network have a higher position than its competitors.

So far, we have introduced cryptocurrencies for investment that have strong support and lower risk and are a good option for long-term investment. But in the following, we will try to introduce cryptocurrencies that have had significant success in the last few years, and investors can get high profits by buying them, while accepting more risk.

Dogecoin

Dogecoin is the first memecoin introduced to the cryptocurrency market, which is currently the ninth most popular digital currency.

Memecoins, like other digital currencies, were not immune from the crypto winter of 2022 and suffered a sharp decline. But in the last months of this year, the purchase of Twitter by Elon Musk greatly affected the price of these cryptocurrencies, especially Dogecoin. After the publication of this news, the price of Dogecoin increased sharply; So that he was able to increase his weekly profit by 100% at one time. This network uses a proof-of-work consensus algorithm and is almost difficult to mine. However, the number of transactions in this network is increasing.

Although the Dogecoin network is not highly scalable, statistics show that this network has the power to support a larger influx of transactions. Dogecoin has been used as an online reward, and Twitter users can reward other users of the network with the help of a reward bot. Due to the low cost of transferring this cryptocurrency, Dogecoin can be used as a popular Twitter reward.

Discentral

Metaverse and NFTs are new and attractive concepts that have recently entered the world of digital currencies. Metaverse is a space where all the daily activities of a normal life can be experienced virtually and with the help of reality-based platforms. During recent years, huge projects with huge investments have been formed in the field of metaverse. If these projects are successful, we have to wait for a new chapter of the communication era.

One of these projects is Decentraland, which has made it possible to buy and sell virtual real estate through its native token, Mana. Many technology experts believe that Dicentraland is the best and biggest project implemented in the field of Metaverse. This can be seen in the many projects and collaborations of Metaverse Decentraland. For example, this platform has managed to convince one of the tech giants, Samsung, to launch its virtual store in Metaverse. Perhaps, if the fall of the cryptocurrency market did not happen in 2022, we would have seen more significant developments in this field. With the passage of time and more awareness and understanding of users towards Metaverse, platforms like Dicentraland will grow significantly.

Sandbox

Sandbox is another successful project in the Metaverse field that has experienced growing adoption in 2022 compared to other Metaverse digital currencies. For example, at the beginning of 2022, Sandbox was able to collaborate with Warner Music to hold virtual music events.

Recently, this network announced the allocation of a multi-billion dollar support fund to build decentralized and creative programs on Metaverse. On the other hand, the users of the earning games of this project are increasing day by day. All these things together have made the native token of this network, the SAND cryptocurrency, to be in the category of digital currencies prone to growth.

Avalanche

Using the innovative consensus algorithm, the Avalanche project has tried to create a network with the most scalability for users. In fact, the main network of this cryptocurrency consists of three different blockchains, each of which has a different function, and this platform is focused on the mutual opposition of these blockchains. This makes Avalanche different from other digital currencies and makes it one of the suitable cryptocurrencies for investment. The high speed of transactions and very low fees have made Avalanche known as one of the main competitors of Ethereum.

Avalanche uses the Ethereum platform to develop its network. The network offers users an accelerator called Avalanche-X, which allows active users to participate in building decentralized applications, such as stablecoins, lending and borrowing tools, and other infrastructure tools.

The native coin of this network, AVAX, started a strong upward trend in early 2021. But by the start of 2022, it entered a long-term downtrend, reaching its all-time low in the final months of the year. Due to the features of this cryptocurrency that differentiate it from other cryptocurrencies, AVAX is expected to be among the profitable assets for 2023.

Cosmas

The Cosmos network is a platform known as the third generation of digital currencies. The goal of the Cosmas project is to create a connection between different blockchains, and this has made this network attractive.

Network users can use this feature to execute smart contracts in multiple blockchains. Cosmas uses the Tendermint consensus algorithm to perform transactions. This algorithm is specific to this network and has enabled the processing of 1,000 transactions in one second with a two-second confirmation speed.

Also, with the help of ATOM cryptocurrency, this network allows its users to run decentralized programs that are compatible with the network. For this reason, decentralized applications in this network are increasing rapidly and have caused the increasing growth of the network.

Optimism

Ethereum is the largest blockchain in the execution of smart contracts, but one of the main problems of this network is its low scalability compared to other competitors. To solve this problem, Ethereum uses the Optimism network with the native OP token, which is a governance token.

In fact, Ethereum uses a general method called second layer to increase the scalability of its network. This layer includes blockchains that run on the main platform of Ethereum.

Optimism is one such blockchain that has locked more than 500 million dollars and has become the largest chain of the second layer of Ethereum. Also, this network tries to enable the development of decentralized applications on the Ethereum platform by adding the EVM feature. Optimism is currently competing with other second layer projects and trying to prove its capabilities. With the increase of this competition, it is expected that the token of this network will grow well in the next few years.

Tony Quinn

Ton Network stands for “Telegram Open Network” and with its high scalability, it has enabled thousands of transactions per second with very low fees.

Until some time ago, there was no official announcement from Telegram regarding the support of the Toncoin project, but since 2021, the founder of Telegram announced his full support for this project in an announcement, while unveiling this project.

Telegram messenger is one of the most popular projects that adds to its capabilities day by day. This issue will eventually lead to the acceptance of TonCoin and the possibility of paying Ton currency in this network. As a result, with the increase in the demand for buying tuna, it will be possible to increase its price.

Zee Cash

In the past year, some governments have put restrictions on digital currencies by enacting various and sometimes unorthodox laws. Among these restrictions, we can point out the ban on mining digital currencies in China or setting taxes for digital currencies in India and some other countries. This issue has led to an increase in the popularity of privacy coins (Privacy Coin) or cryptocurrencies with more privacy.

ZCash is one of the prominent cryptocurrencies in the crypto market. ZCash project used ZK Stark and ZK Snark system for the first time. This network uses the Zero Knowledge Proof algorithm and pays special attention to users’ privacy.

The technology of this network is such that it provides the possibility of hiding the information of the sender, receiver and transfer amount in transactions. The difference between ZCash and other similar projects is that hiding transactions in this network is optional. Users can also specify which part of the transaction should be hidden.

ZCash has interesting development programs and updates based on them. The last update of ZCash is NU5, which was done in order to increase the security of the network.

ZCash is one of the popular cryptocurrencies supported by “Vitalik Buterin”, the founder of Ethereum, which made him experience joint programs with this network.

Another important point about ZCash is the limited supply of this cryptocurrency up to 21 million coins.

How to identify digital currency prone to growth?

Note that the cryptocurrencies mentioned in this article are just a suggestion for you. In order to choose a cryptocurrency that is prone to growth and add it to the investment portfolio, you need a series of information to make sure that the chosen cryptocurrency is a suitable option for investment.

To get this information, you can use the analytical methods of the cryptocurrency market, i.e. fundamental analysis, technical analysis and intra-chain analysis.

In fundamental analysis, the information related to the cryptocurrency project is studied and all quantitative and qualitative issues of this project are examined. The purpose of this work is to determine the intrinsic value of a cryptocurrency. If the current value of the desired cryptocurrency is lower than its intrinsic value, it will be a suitable option for investment.

But this is not enough; In the next step, using technical analysis, it should be checked whether the chart of this cryptocurrency is in a suitable position for buying or not? In fact, technical analysis is used to receive buy and sell signals.

In addition to the above, on-chain analysis also helps you predict market trends and user sentiments by examining blockchain-related information such as hash rate, number of transactions, number of active addresses, on-chain volume, etc. Therefore, using these analyzes together can provide useful information to the trader. Also, keep in mind that people’s analysis may be different from each other.

In addition, each person has a different level of risk tolerance and investment time horizon. Therefore, each person should determine the right investment option and how to manage it according to their trading strategy and goals. For more information, we suggest reading the digital currency training article.

Conclusion

After the global events of 2022 and the collapse of cryptocurrencies this year, many people are skeptical about investing in the digital currency market. But you should keep in mind that digital currencies are here to stay and they are not going away anytime soon. The downward trend of this market will not last forever. So now is the right time to invest.

In order to make a successful investment, you need to consider all the important components of buying a cryptocurrency. Among these components, we can mention security, support, having practical projects, etc.

In this article, we tried to introduce you to cryptocurrencies that are fundamentally suitable for investment in 2023. You can choose your desired option based on your strategy and goals, after technical and in-chain review.