5 Things to Expect from Crypto in 2023

5 Things to Expect from Crypto in 2023

Opinions expressed by Entrepreneur Contributors are their own.

For many reasons, 2022 was one of the most memorable years in cryptocurrency’s short history. We witnessed the industry’s beloved hero Sam Bankman Fried’s spectacular exit. Grace is gone At a speed unmatched Bitcoin’s crash From $69,000 to $22,000

Despite a very negative year, we have seen record levels of development in the industry’s most popular Blockchains. Charles Hoskinson, Cardano founder, stated that more than 1,300 applications were being built on top the Cardano network. Hedera’s Hashgraph network, on the other hand, expects that more than 80 applications will go live in Q1 2023. Shayne HigdonFounder and CEO of The HBAR Foundation.

This rate of development is promising, and should continue unaffected by industry variables. Let’s take a look at some other trends that we can expect for crypto and blockchain in 2023.

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1. More volatility

You’ve likely heard it from many sources that “the bottom is in”, signaling that we should be entering an all-out vortex to new all time highs. We all pray for shortening. Bear markets There are many reasons why the road to record highs in the future could be bumpy.

First, monetary policy might remain strict as inflation is still far below the Federal Reserve’s target at 2%. However, a Federal Reserve pivot is not necessary if inflation reaches 2%. However, indicators must be on track to reach the target before any meaningful easing can occur. Openly, the Fed has stated that it wants a Federal Funds Rate of 5% — currently we are 50-75 bps from this number. The Fed has been very open about what to expect. How We get to where they say, not If.

It can be reduced to ECON 101’s perspective. Fed raises ratesWe usually There is a pullback in the prices of risk assets, and Bitcoin is no exception. Higher rates can also affect the ability of the average person to pay for everyday items, especially the most expensive like transportation or lodging. This is because internet discourse and the ‘Discord Bros, who offer investment advice, often believe bear markets have expiration dates. Unfortunately, this is incorrect.

Related: Keep Calm: Three Ways to Capitalize during the Crypto Winter

2. A declaration that Bitcoin is dead

Extreme viewpoints are more common in times of extreme pressure. If you don’t know it, you will likely hear a lot about how Bitcoin is suddenly extinct or a scam or pointless technology. This is often a sign of too much screen-time. People who have experienced the pain of having their net worth plummet almost immediately often forget why they started their investment journey. Bitcoin is, for what it’s value, declared dead The network has been used over 400 times and has not faltered for a second.

3. More insolvencies equals more bankruptcies

As with traditional financial marketsThe’search for yield’ can lead market participants into trouble, sometimes irreversible. During bull markets, leveraged positions and groupthink strategies can be very lucrative. But they can also be profitable when the tides change. exacerbate losses To the point of irreparable damage. Crypto markets are no exception.

In the event of a looming failure, struggling businesses are more likely to take unnecessary risks to reverse their course. This industry faces greater pressure than other sectors to create a profitable business. Failure is more likely to be confused with the narrative that technology is problematic than other macroeconomic factors.

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4. Fewer celebrity endorsements

Celebrity endorsements are a key component of enterprise success, especially in Western countries. Global marketing teams rely on the endorsements of public figures to promote their products, regardless of whether they’re selling soda or software. Due to recent regulatory actions, I expect many public figures will be much more reluctant to collect checks in exchange for endorsing crypto-related projects. First, we saw Kim Kardashian After the promotion of EthereumMax, a settlement was reached with the Securities and Exchange Commission for $1.3 Million. We witnessed the beginning of probing into shortly after this event. Stephen Curry A group of celebrities associated with FTX.

5. More clarity in regulatory matters

Last but not least, regulators around the globe will be focusing more on crypto regulation. As the asset class grows, so does the need to create. Safe and meaningful rules The possibilities of blockchain technology allowing us to interact and build new things are endless. Despite the fact that the market capitalization of the asset class is much lower than that of Apple (AAPL), regulators and I know that this could change drastically after the next bull run. This will make it impossible for regulators to postpone regulating the asset classes due to the increase in the number of people involved and the total wealth at stake. The question is, “How?” Just What are the regulations?

Related: 5 Ways to Increase and Maintain Your Wealth During the Cryptocurrency Dip

Hodl on

Although there are many challenges ahead of us as 2023 approaches, I want to remind you that bear markets are necessary. They keep us honest and force our hearts to love our assets for what we are, not what they are worth. Patience can be a very lucrative virtue in crypto.

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