Five possible developments next year
2023 will mark a new year for crypto as the industry tries to recover from collapses and crashes. Here are our predictions.
In 2022, several major crypto companies and projects collapsed, including Terra, Celsius, FTX, BlockFi, Voyager Digital and others.
The weak crypto market means that other companies are likely to become insolvent or face bankruptcy in 2023, especially if they rely on loans and investment of digital assets. That said, it’s unclear which companies are most at risk.
The first Bitcoin spot ETF – an investment vehicle that provides exposure to Bitcoin – could be approved in 2023. The approval of Bitcoin futures ETFs in 2021 has paved the way for a spot ETF, and Grayscale’s aggressive push could get approval this year.
If a Bitcoin spot ETF is not approved in 2023, it is possible that one will be approved in 2024, especially if the SEC leadership changes after the US presidential election.
The total value locked in DeFi is likely to fall. Although the amount of value locked in various Ethereum-based DeFi platforms increased until 2022, the 2022 market crash caused DeFi locks to drop from $100 billion to $25 billion during the year.
Nevertheless, DeFi seems to remain popular with a different goal, as the amount of Ethereum invested has varied between 15 million and 30 million ETH since the end of 2020. Overall DeFi losses appear to have been exacerbated by ETH’s own losses.
Bitcoin miners are likely to pour more power into mining in 2023. Despite falling crypto prices, rising electricity prices, and regulatory restrictions on mining facilities, Bitcoin’s hash rate has been increasing more or less continuously since July 2021.
Miners are likely to remain dedicated in anticipation of the Bitcoin halving in May 2024, which will reduce mining rewards to reduce inflation and increase competition.
Amazon or Google could conceivably start offering crypto services at retail in 2023. Amazon is currently working on enterprise blockchain, while Google Cloud is doing analytics. Each firm can combine this effort with its trading services.
This prediction is purely speculative. However, other top companies like PayPal have entered the crypto industry by surprise. As such, it is not inconceivable that Amazon or Google could move to consumer-oriented crypto next year.
Disclaimer: the information herein is provided without regard to your personal circumstances and should therefore not be construed as financial advice, investment recommendation or an offer for, or solicitation of, transactions in cryptocurrencies.
