Introduction
2022 is going to be an unforgettable year for crypto enthusiasts. A year of mixed emotions with volatility still being the most apparent feature of the industry. Although an awful end with the FTX debacle, the crypto industry had a great start to the year.
Early 2022, the crypto industry achieved a market capitalization of $2.2 trillion, but this height was short-lived due to major bankruptcies that hit the industry. Losses from the Luna and FTX meltdowns have been estimated to cost over $300 Billion, with investments currently on declining, sources claim this could mark the start of the crypto winter. However, the bear market offers an opportunity for more investors to purchase crypto at a low price.
Though the crypto market has once again proven to be extremely volatile this year, using past trends and events we’ll attempt a forecast of the cryptocurrency industry in 2023. Highlighting possible outcomes in areas like regulation, NFTs, and exchanges to mention a few.
1. Crypto Regulation on The Rise
The recent events in the crypto market have sparked the need for some control. It appears that the losses in the crypto industry can only be mitigated through regulation and not a ban. 2023 is going to see more crypto regulatory frameworks. A major pointer towards this can be found in the U.S. Executive Order recently signed by Joe Biden, it clearly states that we (the United States government) need to regulate it…make sure the U.S. remains competitive and leads the blockchain movement.
2. 2023: Web3 Landmark Year
2022 was a great year for Web 3.0. The first quarter of the year saw web 3 projects receive over $2.5 billion in funding. Given the prediction that more developers will enter the Web 3 sector to explore its potentials, we expect to see more blockchain games in the coming year. Currently, Twitter is studying ways to incorporate the web 3 concept into its social network. Based on this, it’s likely we see other companies following this trend in 2023.
3. Metaverse in 2023
The futuristic digital world which started off as a social media has quickly morphed into a commercial hub. In early 2022 Metaverse was the talk of the town, but the noise died towards the end of the year. So, what could we expect from the Metaverse in 2023? “In 2023, companies will view the Metaverse as a tool to unlock value. It will become more of a means to an end. We expect to see clear intentions around business value before organizations dive in.” – Alex Howland, president and co-founder of Virbela.
4. DeFi Surge
Recent innovations and enormous yields have contributed greatly to the DeFi rush. In 2023 we expect to see stricter regulations, leading to more control in the crypto industry. This means DeFi will be safer for new entrants, and investments will be on the increase. “This year has been a watershed moment for DeFi, and the wider crypto sector. We’ve had not one but two market flashpoints that have taken out some big names in the space. But this will clear the way for stronger, better organized, and more sustainable innovators in the coming years.” Katie Evans, head of PR for Swarm.
5. Bitcoin increased adoption
The recent trend of countries adopting Bitcoin as a legal tender is likely to continue. Bitcoin is known to be the safest with a lesser degree of volatility when compared to other cryptocurrencies. This makes it a choice digital currency for countries. “There’s becoming a roadmap for countries that want to adopt Bitcoin. And, given what’s going on right now in the world with rampant inflation, and the U.S. as the reserve currency, I wouldn’t be surprised if next year, 2023, is the year of country adoption of Bitcoin,” Ran Neuner – Co-Founder & CEO – Onchain Capital
6. Investment DAOs
DAOs are slowly becoming a mainstay. Its innovative framework has revolutionized organizational structure. With increased transparency in 2023 DAOs will be safer. This will lead to an increase in organizations as well as members. “Although it may seem that the current bear market has forced the industry to hit pause, the growth of new DAOs has accelerated exponentially, with each month in 2022 producing more new DAOs than 2021 witnessed altogether,” says Burke referring to the past trend of DAOs.
7. More blockchain Innovations
From proof of work to proof of history, the innovations in blockchain seem to be never ending. Based on this trend, we expect to see new blockchains and consensus mechanisms in 2023. Also, we could witness more integrations of smart-contracts.
“Established corporations still have a place in Web3 when they combine their power with the disruptive technology of blockchain startups. As these collaborations increase, the result will be a flood of real-world use cases and values that prompt sustainable, healthy, responsible growth for the industry.” Max Thake is the Co-founder of peaq.
Final thoughts
Still in recovery, the crypto industry is expected to be slow due to cautious investment. But expected regulations in 2023 will provide necessary control for increased investments. We also expect to see more countries take the footsteps of El Salvador in making bitcoin a legal tender. In conclusion, analyzing the trends of the crypto industry is useful for planning ahead and making informed decisions.
