To round out the year Stockhead has been asking various experts to help us make sense of the past 12 months in the space, as well as predict what’s next. Here’s what Matt Willemsen over at Aussie crypto-education platform Collective Shift had to say. 

 

It wasn’t all doom and gloom

Hi, Matt. A treacherous year for crypto investors, wasn’t it. From chatting with you guys at NFT Fest recently, though, I know that you still see some positives. Er, can you remind me what those are again? 

Yeah, I think there are definitely some positives to take from this year, including strong growth in developer activity, hackathon participation, continued institutional adoption, Ethereum’s Merge and increasing NFT interest. 

So, according to an October report by Alchemy, 2022 was the most active year yet for Web3 developers. Also indicative of a thriving developer ecosystem, hackathon participation was mostly up this year. Of note, November’s ETHIndia 2022 was the largest-ever Web3 and Ethereum hackathon – with 459 projects submitted by more than 2,000 attendees from 30-plus countries. 

And adoption – despite the gloomy market conditions, financial institutions continued to expand into crypto. Highlights included:

• BNY Mellon, the world’s largest custodian bank, launching a crypto-asset custody solution;

• Fidelity releasing its retail crypto-trading app; and

• BlackRock, the world’s largest asset manager, partnered with Coinbase to make it easier for its institutional clients to access crypto.

And the Merge?

Yep – Ethereum actually merged! [From a Proof-of-Work protocol to Proof of Stake.] The result of several years of R&D, this enormous technological accomplishment laid the foundation for Ethereum’s future scaling efforts.

As for NFTs, although prices have tanked at various times this year, there’s been a lot of development in that sector…

Yep, prices of collections aside, the nascent NFT market grew considerably in 2022 across various metrics. Additionally, several high-profile brands expanded into NFTs such as Tiffany, Starbucks and the Australian Football League (AFL).

 

The bottom is in

Here’s one we’ve been asking just about every man, woman and doge just lately. How can “crypto” fix itself in 2023? What needs to happen for the industry to regain some of the trust it lost and for the market to gain some solid momentum?

The good actors in the industry must continue working hard and with high integrity. Over time, their work – provided it’s value-adding and meaningful – will not only help repair the industry’s currently marred reputation but will also help more people appreciate the value of permissionless blockchains.

Now for a question that’s ridiculously hard to answer with any certainty… can you give us any predictions for the crypto market in 2023?  

The cycle bottom has already happened. And BTC will trade between US$20,000 and $30,000 for the vast majority of the year.

Nice. Short of some other massive crypto company imploding, the US banning Bitcoin or Satoshi turning out to be Craig Wright after all, I tend to agree with this assessment. What hopes do you have for the industry next year? 

My hope is that industry bodies – particularly those in the US, such as Coin Center, Blockchain Association and the DeFi Education Fund – can sustain a healthy and productive relationship with policymakers, despite the material damage that Sam Bankman-Fried and FTX have inflicted on the industry.

And, what gives you the jitters about what might happen to suppress crypto prices next year? 

My fear is simply that the crypto market struggles to perform in 2023 during a probable economic recession and relatively tight monetary policies. I’m concerned about how very little discussion I hear about this.

Just because the next Bitcoin halving is in 2024, it doesn’t mean BTC’s price will move in accordance with previous halving cycles.

 

Now’s the time to DCA

American venture capital investor Tim Draper still thinks Bitcoin can hit US$250k in 2023. Is he dreaming? Multinational bank Standard Chartered meanwhile has put a $US5k BTC in its frame. Is it also dreaming?

Both are dreaming. Those predictions make for eye-catching headlines and not much else.

Is now a good time to start dollar-cost averaging back into the market, with some caution? Personal approach? 

I bought my first cryptocurrencies for the year – BTC and ETH – earlier in December.

I think now is the best opportunity of this market cycle to start a DCA strategy. Whilst prices could fall further, I believe that most of the Terra-instigated contagion risk has already materialised.

 

Note: none of the information and views expressed in this article should be construed as financial advice. 

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