With 2022 headed towards its end, investors seem to wonder what lies in the 2023 version of cryptocurrency market. It is believed that market analysts expect 2023 to drive global adoption of Web3.0, cryptocurrencies, and other underlying technologies.
According to Shufti Pro, a software company, major events which impacted the cryptocurrency market in 2022 include Bitcoin and Ethereum losing over 50% of its value, FTX’s collapse leading to an eight billion dollars loss in accounting, and Terra Luna’s 95% crash in value which caused over $60 billion drainage. However, market analysts predict that 2023 will focus more on developing a cryptocurrency-oriented framework and enhance central bank digital currency (CBDC) use cases.
“I believe global regulatory and taxation coordination will be two themes that’ll play out in 2023. The collapse of Terra Luna has aimed to enhance the outline and accelerate the development of more stablecoins and CBDCs across the world. While a lot of pilots have started this year, the mass implementation of the same should be expected in late 2023,” Anurag Dixit, founder, Kunji, a cryptocurrency asset management firm, told FE Blockchain.
Industry reports have shown that 2022’s cryptocurrency market faced implications of factors such as global monetary policy drafted by central banks, Ukraine-Russia crisis, China-Taiwan conflict, among others. Insights from Institute of Entrepreneurship Development (IED), a research-based organisation, highlighted that 2022 itself contributed towards around three billion dollars loss sustained due to crypto hacks, along with smart contract-based exploitations.
“I think 2022 has eroded a large amount of wealth, wiping out more than two trillion dollars of national wealth from investors. 2023 is likely to be a year of consolidation and growth. New projects are expected to emerge and the sentiments might appear to improve in the later end of the upcoming calendar. However, it is yet to be seen how the year pans out,” Dileep Seinberg, founder and CEO, MuffinPay, a cryptocurrency-based company, stated.
Moreover, it is predicted that 2023 will witness a coexistence between Central Bank Digital Currency (CBDCs) and Bitcoin use cases, as the former has potential to accelerate adoption of the latter. As reported by Coinbase, a cryptocurrency exchange, in 2023, digital asset selection will make transition towards cryptos such as Bitcoin and Ether, on the basis of factors such as tokenomics, maturity of related ecosystems, and relative market liquidity. Nonetheless, Bitcoin mining industry is expected to consolidate more in 2023.
“Even though 2023 is a year where we expect a promising future, I believe it still isn’t enough to solidify the entire industry. In the coming years, however, we’re expecting to dive more into the meta projects, get improved adaptability, find better use cases than we already have, and most importantly, have a regulated crypto ecosystem,” Punit Agarwal, founder, KoinX, a cryptocurrency taxation platform, mentioned.