What Is the Place of Cryptocurrency in 2023?
The past year (2022) saw the digital asset industry through a game-changing season. Following the spiralling growth the market experienced in 2020/2021, the reverse trend witnessed in 2022 drew various questions regarding the industry’s security.
Expectedly, 2022 introduced more topics and discussions on the value of cryptos against fiat money. Various experts tried to explain how the crypto market reversed its November 2021 ATH cap of $3 trillion to $727 billion in November 2022. Then we had the almost never-ending debacle between government authorities, the SEC, and capitalists.
In this article, we examine what leading experts in the crypto space think about the potential outlook of crypto in 2023.
Bitcoin Fluctuations in 2022
Suffice it to say that the harsh turnout of events in the crypto space last year was largely shocking. If anything, it educates and reminds everyone that predictions could be wrong. However, that shouldn’t stop us from future forecasts, especially following the collapse of FTX last November. Plus, it doesn’t deny that several other speculation predictions in the industry have proven reasonably true.
| Month (ending) | Bitcoin Price ($) |
| January | 37,041.06 |
| February | 38,031.76 |
| March | 47130.64 |
| April | 38,735.06 |
| May | 31,511.55 |
| June | 19,488.81 |
| July | 23,796.76 |
| August | 20,242.22 |
| September | 19,414.69 |
| October | 20,498.35 |
| November | 16,874.78 |
| December | 16,546.73 |
Top Predictions From Industry Experts on Crypto in 2023
The crypto industry is expected to continue its rapid evolution in 2023, with a range of new developments and innovations on the horizon. As the adoption of cryptocurrencies continues to grow, industry experts are making bold predictions about what the future of crypto might hold. The major predictions on the outlook of digital assets in 2023 include the following:
- The growth of web3
- Issues around altcoins
- Energy prices
- More losses
- Regulation
- Increased global adoption
The Growth of Web3
Web3 platforms will continue to grow, according to predictions from Alex Zhang, a de facto head of Friends with Benefits DAO. Speaking of platforms, Cathy Hackly, chief metaverse officer, thinks the space will see more input from the fashion industry. Cathy predicts that consumer and luxury brands will partner with Web3 personalities to discover new commerce models.
The head of Binance APAC, Leon Foong, also predicts that Web3 infrastructure will keep growing and attracting investments. He adds that his organization has plans to boost its web3 infrastructural security toward protecting users and rebuilding the industry.
Issues Around Altcoins
One leading issue around altcoins (everything other than BTC) borders around a US debate on how to categorize them into asset classes. As confusions around the identity of digital assets continue, the SEC maintains a vocal stance to prosecute any asset that seeks to operate as security. The regulatory body uses the Howey Test in determining if a transaction has broken its rules.
When SEC conducted its Howey Test on LBRY’s LBC token offerings, it concluded the token transgressed its boundaries by selling ‘unregistered securities.’ Reports on the prosecution highlighted that the SEC flagged that LBRY team members use culpable language in their communities.
SEC’s suit also flagged language by some community members that promised an increase in asset value with time, flaunting the Howey Test. On the other hand, there are arguments in favour of LBRY, with some proposing that the token’s gains are insignificant. However, regardless of size, increasing value means gaining. Suffice it to say that the suit’s verdict may determine whether the rest of the altcoins in the crypto space will bear the term ‘security’ or not.
Here’s one reason why the confusion around the security status of altcoin is relevant. Many projects and talents exit the industry prematurely due to turbid regulations around the digital asset space.
Energy Prices
Energy rates will keep remaining on the rise for a while, especially as China reopens its economy after a long partial shutdown due to COVID-19. The result of China’s reopening is an increased demand for energy. Europe also sees heightened scarcity in energy supplies as Germany shifts to wood and coal to maintain heat. All these events are poised to raise energy prices.
No thanks to the lingering Russia-Ukraine war, Europe’s political situation means oil prices will be more unstable. The uncertainty these economic and political situations bring will directly impact macroeconomics, which stiffens the climate for risk-on assets like digital assets.
More Losses
Similar to players looking for the best gambling sites offering 10 deposit bonus casino, to avoid serious losses when playing for real money and using bonus codes, cryptocurrency market participants, especially end users, should look for ways to minimize losses as it is expected that the year could bring significant losses.
Several serious crypto investors last year likely registered a few losses too. Following FTX’s collapse in mid-November 2022, many organizations and banks grappled with restoring their losses. Cas Piancey, a writer and crypto journalist, predicts the year will see several companies close unexpectedly. To him, FTX’s collapse created a contagion that, in his words, ‘is too vast and too difficult for us all to quantify.’
Regulations
Anyone could guess that clashes around regulation would continue in 2023. But the results of lawsuits and proposed laws may be farther-reaching. Seeing the digital assets industry witnessed several breakdowns in 2022, the New Year should bring in much more collaboration with authorities globally.
Fortunately, these collaborations will likely introduce vast foreign investment into the space. Meanwhile, intergovernmental bodies will sustain their suggestions and positions on national financial systems concerning emerging assets. These institutions include entities like the Organization for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF).
As Laura Shin, host of the ‘Unchained’ podcast opines, the crypto industry will see harsh regulation and a reverse contest by the crypto community to defend decentralization. Dubai, for instance, which increasingly grows into a global hub for digital assets, has a grey label from intergovernmental bodies.
Of course, not all regulations in 2023 will be downright harsh deterrents against crypto adoption. We can safely expect some institutional entities to roll out laws that encourage participation in the industry.
Increased Global Bitcoin Adoption
With the increasing popularity of digital assets and the technologies behind them, the number of crypto asset users will also increase. We can expect an increased demand for digital assets across countries and continents due to:
- Growing acceptance by businesses
- Increased investor interest
- Improvements in Bitcoin infrastructure
- Decentralized nature
- Security and privacy
Africa is one such region seeing an increased record of crypto adoption. Alex Gladstein, chief strategy officer of the Human Rights Foundation, said, ‘global adoption is probably the number one story for next year.’ Alex made these disclosures during a conversation with a Coindesk reporter after returning from Africa’s first Bitcoin Conference in Ghana.
Attendees from conflict zones on the continents, from rural Cameroon, Somalia, and DRC, made the three-day conference in December 2022. Moreover, we can expect new countries to adopt BTC as a legal tender following El Salvador’s footsteps.
Conclusion
The global concerns around digital assets are no longer strange to all parties. Therefore, expecting an immediate response or effect isn’t out of place. Financial policies, inflation, and many other metrics are highly volatile. Nonetheless, digital assets are poised to introduce multiple opportunities for all participants, being a volatile asset class in 2023. The year will pose a chance to harness these opportunities towards providing global best practices in the asset management services sector.