Crypto in 2023 will see consolidation as weaker market players fail to gain enough traction to scale as others break through into mainstream relevance.
- It is hard to predict how long the current crypto winter will last since global economic well-being will continue exerting considerable pressure on the timelines for the next breakout.
- Corporate acceptance will drive mainstream adoption of crypto in 2023.
- Crypto utility will be the defining factor for the industry in 2023.
The value of crypto in 2023
It is hard to predict how long the current crypto winter will last since global economic well-being will continue exerting considerable pressure on the timelines for the next breakout. Crypto investors are not out of the woods yet. They will likely see another dip followed by a slow climb back. The last crypto bear market lasted for over two years. With the macroeconomic climate worsening, only one year has passed into the current one.
If prices hit bottom, then growth for crypto in 2023 will remain feasible. While the US dollar remains strong, such a scenario remains unlikely. For that, there will need to be blood in the streets. There is blood, but it has not yet hit the mainstream. Once it does, the crypto world will have bottomed out.
A recession in 2023
A seemingly inevitable recession will have a significant impact on crypto in 2023. Warning signs are already visible, with treasury yields hitting new highs and stock markets hitting new lows. Production has remained low since the pandemic and might grind into an extended stagflation period. Retail confidence remains low and will affect spending since people will tighten their belts in anticipation of a possible cost of living crisis.
Globally, stock markets have already been battered and will continue to take a beating as people convert their investments to cash to avert further devaluation of their holdings. However, once volatility tones down, investors will revert to commodities.
In a recession, everything comes down at once. At first, commodities dip alongside equities and lead the bounce-back process. Once the world is in the throes of a global economic downturn, a variance in the connection between crypto and other commodities markets will become visible.
Bitcoin as a store of value in 2023
It is common for stores-of-value to take a beating early in a recession with late-stage recoveries. It would not be surprising to see commodities such as bitcoin and gold rebound before most assets when the recession takes hold.
Bitcoin is a store of value with utility and thus behaves like a commodity. Therefore, Bitcoin maintains its demand no matter who goes on within the macroeconomic environment, possibly not in making physical things but as a delivery tool in financial and eCommerce services.
Corporate acceptance to drive mainstream adoption of crypto in 2023
Brands will be a significant driver for mainstream crypto adoption in 2023. More pilot programs will come in 2023 as corporations keep trying out the web3 potential. Corporations will move beyond cash-grab NFTs, looking at the properly planned integration into their ecosystems.
Loyalty schemes represent a use case where blockchain or blockchain offers an excellent fit and opportunity for brands to innovate schemes mutually beneficial for businesses and users. The creation of fundamental App chains will continue to make it easier for businesses to build crypto structures. Crypto in 2023 will see consolidation as weaker market players fail to gain enough traction to scale as others break through into mainstream relevance.
Next year will be interesting. More partnerships between blockchain businesses and other brands will emerge. Brands will bring customers as crypto and blockchain offer technology.
Utility as a fundamental growth vector
Crypto utility will be the defining factor for the industry in 2023. Without it, all that remains are catalysts on which to speculate. As more use cases emerge and more people major on blockchain to leverage that utility, the primary delivery system, the coins, will have more value. Consequently, price improvement will correspond with people’s interests.
The revived interest in crypto in 2023
NFTs and DeFi drove crypto adoption in the last bull run. On that note, NFTs remain the most significant drivers of adoption since they make crypto easily accessible for anyone to understand and participate. People usually desire to enter a market when it is valuable, fun, and accessible. Similar to the internet era, the industry will experience a return to the boom as stakeholders introduce easier onramps and ways to use crypto. This further emphasizes the corporate crypto adoption’s role in bringing more people to the industry.
The prospects for the Metaverse
The Metaverse remains in the experimental phase. In 2023, more brands will trail the Metaverse applications they could showcase to customers. This represents the first move towards public onboarding. The Metaverse, as currently imagined, “Ready Player One” style, will kick off as brand popup installations in retail and commercial landscapes.
Moreover, the definition of the Metaverse will move beyond gaming and virtual reality (VR), just two features of the larger technology. In numerous aspects, the Metaverse is just another aspect of modern reality incorporating both mixed and augmented reality. It represents anywhere technology impacts and enhances people’s interaction with reality.
The FTX collapse and regulation step up
The implosion of FTX witnessing towards the end of 2022 is a significant shock in the digital assets sector, and its reaction will define crypto in 2023. FTX was a significant player in the crypto industry with considerable backing from big mainstream investors, high-ranking sports sponsors and leaders seen as part of the financial establishment. The collapse is a sad scenario for the people who lost money and will have grave implications for those involved as the whole thing plays out.
And yet, the crypto industry’s shakeouts are beneficial since they will force the sector to become more professional and help bring DeFi and the possible accompanying opportunities closer to the mainstream. The crypto winter and the FTX collapse represent two significant catalysts accelerating crypto’s growth in 2023.
Blockchain and crypto have always been on the cusp of legitimacy in financial services. Next year, the regulators circling the crypto industry will start engaging purposefully. Consequently, the good actors in the crypto space will swiftly move towards the improved transparency that blockchain technology allows. Increasingly, it is expected the crypto investors burnt once too often in the “wild west” will start to vote with their feet and look for a degree of old-school reassurance in conjunction with next-generation fintech.
Furthermore, regulators will make demands. Excessively high losses have been a reality in many sectors where investors speculate since crypto gained prominence in 2011, but this time the harm is billions at once. Of course, this is a defining moment, and many predict that regulators will not wait to see what happens next. Expect authorities globally to take a tough stance. There will be increased pressure for enhanced regulation, and the ramifications of possible crypto legislation will be felt when this becomes a reality. In many aspects, many anticipate that 2023 will be the year when cryptocurrency finally gets regulated.
Enhanced transparency in the crypto industry
Similarly, many firms would proactively provide cutting-edge transparency to address market concerns. What “Proof of Reserve” genuinely implies will become a hot topic in the crypto industry. For instance, in recent days, there have been incomplete audits from exchanges that provide their balance sheets but not their liabilities. This will not suffice when investors are wary, so people should expect much energy to focus on crypto in 2023. Significant efforts will go towards establishing and introducing online services that create enhanced transparency with proof and rigorous audit while safeguarding the autonomy of currency holders, with “zero-knowledge proofs” technologies becoming a leading example.
The trend toward regulation and transparency of crypto in 2023 will gain traction. Consequently, more enterprises in the industry will grow emboldened and begin to interact with crypto to offer services to their customers. Despite recent developments in the crypto industry, it remains a significant area of interest. Customers are continually looking for methods to engage in the possibilities of a decentralized, low-cost, globally accessible banking system. They will, however, want to do so as securely as possible, with the comfort provided by professional guidance, rock-solid custodian services, and organizations with a strong history of governance and thorough third-party audit.
Crypto became cautious in late 2022 and will aim to get serious in 2023. People should expect to see more suits and fewer surf and skater clothing at events and conferences where the crypto community meets.