‘Crypto will build back stronger, better’: Exchanges Coinbase, eToro, CoinSpot and CoinJar look ahead
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After speaking with a handful last week, four more prominent crypto exchanges (Coinbase, eToro, CoinSpot and CoinJar) give Stockhead their thoughts on the crypto year nearly behind us, and the one ahead.
Recently, Stockhead spoke with local crypto exchanges BTC Markets, Kraken Australia, Binance Australia and Independent Reserve, as well as regulations expert Steve Vallas of Blockchain APAC.
This week, four more prominent Aussie exchange reps – from Coinbase, eToro, CoinSpot and CoinJar – shared their expert takes and predictions with us.
– John O’Loghlen, Coinbase Australian Country Director
Hi, John. It’s been a challenging year for the crypto industry and market. What insights can you share regarding the past several months?
As a company, we’ve experienced down cycles before. We don’t focus on the short-term ups and downs. Instead, we look five, 10 years ahead, at the long-term tailwinds from trends like ecommerce, digital payments and internet distribution. Over the long run, there is a significant opportunity to create more economic freedom using decentralised finance, through smart regulation and innovation – that’s what we’re focused on.
How do you think investors’ perceptions of crypto might’ve changed in 2022?
People are rightly reassessing the value of key utility cases for various assets. The same thing happened in the dot com bubble, where technology breakthroughs and ideas were wiped out because they were early, only to re-emerge later. We expect this to happen to crypto firms.
The space will mature as people get more disciplined with their investments and companies prioritise compliance and trust. Australia, in particular, is leading the way in Web3 and crypto innovation; the country is full of entrepreneurs, so we can expect to see a growing number of use cases in 2023.
How does the crypto industry fix itself? What needs to happen to see greater trust and market momentum return?
This is a moment of reckoning for the industry to build better systems and promote regulatory clarity. The right operational and legal protections are paramount to rebuilding trust.
There is an opportunity for like-minded countries to work together with governments and industry to create an international framework for regulation that fosters consumer protections and enables innovation.
We believe regulation will support the growth of digital assets and since the inception of Coinbase, we’ve sought to be the most secure and trusted global platform by working collaboratively with regulators, policymakers and industry.
Crypto, Web3, and the financial internet are the most valuable innovations of our time. DeFi has created the underpinnings of an internet-based financial system with no single party in control. The foundations for Web3 and a user-owned internet have been laid, but as the sector continues its growth trajectory, compliance controls are going to become increasingly important.
We know consumers feel safer with regulation and compliance measures in place, and the establishment of clear, business-forward regulation in Australia will play an integral role in re-establishing crypto as a viable and safe.
What can we expect in 2023? Care to make any predictions?
In addition to the FTX hangover and regulatory trends, we’ll likely see a shift in consumer behaviour and expectations. People will be more disciplined in their investments, educating themselves on compliance, tax, governance and their local policies.
Following the collapse of FTX and the ripple effect it’s had on the wider industry, consumers are aware of the depth of industry connections and the need for their own due diligence. We think it’s important for regulation to create the guardrails that both protect consumers and allow innovation to thrive.
And on that point, we’re heartened to see the Australian government working on this through the token-mapping consultation at Treasury.
Down cycles focus innovators on building compelling products and sustainable business models, and as global markets slowly recover, we believe the crypto ecosystem will build back stronger and better than before.
– Josh Gilbert, eToro Market Analyst
Crypto 2022, Josh… besides a hit to portfolios, what can we take from it all?
The industry will learn from some of the major blunders we’ve seen this year, which will almost certainly lead to more transparency across the space long-term, helping to bring more accountability and trust into the crypto market. It will likely accelerate regulation, which I believe will be welcomed by most of the industry, particularly investors.
How does “crypto” repair in 2023? What do you think needs to happen for sentiment, and the market, to improve?
Further regulation will help build more confidence amongst investors in the new year. We could also see the macro backdrop improving. Lower inflation, a slowdown in the colossal tightening from central banks, ultimately creates an environment for investors to start adding some risk back to their portfolios.
Got any specific or broad predictions you’d care to make for the industry/market in 2023?
Halving cycles are a big part of crypto, and in 2024, the next Bitcoin halving will take place. The halving will influence investor sentiment because of supply and demand considerations. The maximum number of Bitcoin that will ever be in existence is 21 million – this, combined with a decreasing issuance due to the smaller block rewards, creates an element of scarcity for the asset and theoretically will create price increases. If new issuance falls and demand remains firm, then prices go up.
And prices have always gone up post Bitcoin halving, correct? But what about next year’s lead-in to that?
Since its inception, each Bitcoin block reward halving has been followed by the next crypto bull market, which is why many market watchers could foresee the next bull market starting to take shape in 2024. But, yes, anticipation of this could also help boost the price throughout 2023.
Are there any crypto narratives that you envisage strengthening from here?
DeFi has felt the force of the market sell-off, but we’ve also seen some technological advancements despite this. There will be renewed efforts to improve scalability like we are witnessing with Ethereum’s highly-developed roadmap of changes such as “sharding”.
Sharding of the Ethereum network is effectively where the network is split into smaller segments – shards – to spread the load, reduce congestion and increase transactions per second on the chain.
Like The Merge, such upgrades will be greatly anticipated by the market. Although The Merge took place in the context of broader macro issues and hasn’t led to positive price changes so far, fresh innovations in a more conciliatory setting could be well received and supportive of a crypto rally.
– Ray Brown, Head of Marketing at CoinSpot
What crypto-related silver linings can you see looking back on this year, Ray?
There are certainly some. At CoinSpot we were able to celebrate the release of our own in-platform NFT Marketplace and CoinSpot Mastercard. As for the broader crypto market, The Merge was able to pave the way for significant PoS use cases.
Also, increasing regulation and the removal of bad actors is clearing the way for a better ecosystem and this will hopefully play positively into 2023.
And lastly, there were some fantastic conferences and community-oriented events that solidified the crypto community, which was especially important in the APAC region post-COVID.
How does “crypto” repair in 2023?
The global economy, including both traditional and cryptocurrency markets, has experienced difficulties in 2022. Instead of using the word “repair,” which implies a returning to a previous state, it may be more accurate to describe the current situation as a bear market.
While past performance is not necessarily indicative of future results, it is common for markets to go through cycles. These cycles are often closely watched by investors, who may be optimistic about a future upward trend or correction, similar to what has been previously observed.
Got any specific or broad predictions for crypto in 2023?
As most of 2022 was a bear market for crypto, this led to a large degree of “behind the scenes” work when it came to new developments in the space. As investors look for markets to warm up in 2023, we anticipate there’ll be some great innovations that will be ready to be announced and rolled out to the community.
The momentum behind Web3 is already picking up pace and will benefit from significant mainstream adoption in the coming months to years as well.
Of course, the use of cryptocurrencies to make streamlined, everyday purchases – such as through the CoinSpot Mastercard, will also continue to build in popularity as markets start to pick up and we anticipate that even during this Christmas period, we’ll be seeing more people buying gifts with crypto and gifting crypto.
Are there any crypto sub-sectors that you see gaining further traction next year?
We’re seeing great NFTs – even homegrown creations like the AO ArtBall series – really redefining how these assets can provide value to holders. Not only this, but we’re seeing Web3 increasing its mainstream appeal and an increase in interest across the DeFi sector.
It will also be interesting to see what’s next for metaverse-related projects as the concept gains greater public awareness.
Asher Tan, CEO of CoinJar
Hi Asher, please tell us you’re finding some positives amid the crypto 2022 crash?
Overall, the crypto crash has made for entertaining reading but continues to be merely a footnote in global economic woes. In spite of the crypto industry’s failures, the fallout has had little effect on the incumbent financial system.
While this is obviously a good thing, at the peak of the market it felt like the prevalence of cryptocurrency was widespread; now we can see we’ve barely scratched the surface.
For operators and builders in this space it is still early and there remains plenty of opportunity for growth and impact.
How does “crypto” repair in 2023?
The fate of firms that have entered, or are close to entering, administration in 2022 will need to be resolved before the industry can move on.
Industry participants are closely intertwined and many will still be dealing with the fallout from the previous year. Positive developments in restructuring of failed companies or the return of, even partial amounts, of customer funds will provide closure and badly needed optimism.
Got some predictions for the coming year?
Critics will be emboldened by negative events and trust in the industry will take a hit.
Progress into banking partnerships and professional service audits have already shown signs of deterioration. Regulators and politicians around the world are similarly adopting tougher stances on cryptocurrency.
And exchanges that have been one-stop shops will start to see services unbundled with increased usage of self-custodial wallets, specialist marketplaces (NFT markets) and dApps.
Which crypto narratives or sectors can you envisage strengthening from here?
The narrative swings back to where crypto has its strongest fit as decentralised money.
Besides Bitcoin, stablecoins and their importance to the DeFi ecosystem will continue to be at odds with attempts at entering the digital money space by traditional institutions and governments.
Just as Terra LUNA provided indication of what doesn’t work in this space, the battleground for stablecoin relevance may well show how important decentralisation really is.
None of the information presented in this article should be construed as financial advice.