Just one year ago, interest in cryptocurrency was at an all-time high. While Bitcoin (BTC-USD) traded around $50,000 and ‘get rich quick’ NFTs made headlines, few could have foreshadowed the trials and tribulations to come. Many of the biggest names in the crypto domain, such as Celsius Network and Voyager Digital (OTCMKTS:VYGVQ), were dealt devastating blows as the months went on. The collapse of FTX capped a horrendous year for the crypto industry. Under these circumstances, making crypto predictions for 2023 becomes a tough task.
However, despite the negativity surrounding the crypto industry, the next year could bring some much-needed respite. We are already seeing several patterns emerging in the crypto sector that will likely carry through into 2023. Those are the themes we will use to make crypto predictions for 2023. If you are interested in what will happen in this exciting space next year, read on to find out.
Regulatory Action Will Continue to Impact the Industry
2023 could be a decisive year for the crypto industry. All around the world, governments are proposing increased regulations and oversight of cryptocurrencies, threatening to erode the decentralization that has helped crypto become so successful.
Cryptocurrency communities have responded in kind, vowing to fight against unfair regulations and protect the independence of their preferred coin. How both sides handle this battle will determine the future of cryptocurrency. It is sure to be an exciting year full of political maneuvering and unlikely alliances as crypto combatants seek a satisfactory outcome in what’s sure to be seen as an ideological clash between opposing forces.
Ultimately though, there is no way the crypto industry can avoid the regulatory hammer for now. As we have seen with the arrest of Samuel Bankman-Fried, former CEO of FTX, in the Bahamas, regulators are not taking the issues surrounding the crypto space lightly. It is vital to regaining trust in the crypto markets. The U.S. House Committee on Financial Services hearing on the collapse of FTX is a great example of how serious such matters have become. We can expect more such activity in the future.
The Web 3.0 Revolution Will Not Stop
Over the years, the rapid growth of crypto projects has led to much speculation and investing, which have become synonymous with the sector. However, in light of larger macroeconomic markets slowing down, this trend should likely shift. We will see more projects focus on one major utility category: meaningful, fun, and social experiences.
This means that more Web3-based platforms and protocols are in our future. That includes interoperable identity, on-chain social graphs, and abstracted social experiences, all powered by blockchain technology. This should enable a secure and immersive online world that provides users with an unparalleled experience while enhancing their privacy. It will be interesting to see how these developments manifest over the coming years as the blockchain industry grows in popularity.
NFTs Are Not Going Anywhere
2021 was an extraordinary year for the NFT industry, with seemingly unstoppable financial backing from some of the biggest Web2 companies. With these reputable brands investing in this new technology, it has laid a clear path for additional investors in 2023 to come forth and help foster growth in the sector. It is a strong indicator that this will be one of the first sectors to recover and thrive fully next year. It’s projected that more financial support will arrive, contributing to further innovation in Non-fungible tokens heading into 2023. It might very well shape up to be an exhilarating year for both experienced and novice NFT investors alike.
The World of Fashion Will Be a Key Driver of Activity
The world of fashion is embracing Web3 technology and driving its widespread adoption. Innovation in the industry leads to collaborations between Web3 tech and brands looking for meaningful ways to connect with consumers. It is one of the key areas to look forward to in the new year. Hence, you cannot discount this when making crypto predictions for 2023 and beyond. And the potential here doesn’t stop there!
Generative AI is becoming more commonplace, but blockchain may save us from being unable to tell the difference between machine-made content and truly human creations. Therefore, it will be exciting to see how these trends evolve as Web3 continues to change our way of life.
The Crypto Space Will Consolidate
One of the key crypto predictions you can take to the bank is consolidation in the industry. The issues we saw this year with the collapse of FTX are the tip of the iceberg. Many other companies which did well during the crypto heydays of 2020 and 2021 are finding it difficult to operate in an environment where the price of Bitcoin is in freefall.
The situation is ripe for consolidation. Consequently, you will see many companies bite the dust and larger enterprises taking over their businesses and assets. We saw a great example of this with the struggles of crypto exchange Voyager Digital. Eventually, the writing was on the wall. Binance US is now purchasing its assets for $1 billion. Such cases will continue in the year to come. Hence, it is safe to assume greater consolidation is on the cards for the industry.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.