Before the year ended, we asked several of our crypto contacts to give us their perspectives on 2022 and what’s in store for 2023. Here then, are more insights from experts on the infrastructure and finance sides of the industry.

This selection of six pundits covers quite a bit of ground, but we thought we’d start with something virtually every crypto investor would like to know, even if specific price predictions aren’t proffered here…

 

CRYPTO PRICE ACTION IN 2023

What do you think will be the general price-action trend for the market this year? Is the BTC and ETH bottom in?

Ashton Addison, Founder of Crypto Coin Show: “Sadly, because of the FTX-related insolvencies and the four-year Bitcoin cycle, I don’t expect a V-shaped recovery any time soon in 2023.

“Beginning with the 2017 bull run, it took three years for Bitcoin to break above its all-time-high and now in this cycle we are one year in, and the first year has been a roller coaster.

“I don’t expect a boring sideways market in 2023, but breaking past Bitcoin’s all-time high in one year seems out of the question for me.”  

 

Kevin de Patoul, CEO & Co-Founder of Keyrock: “We expect low volatility due to the crypto bear market and continued restricted monetary policies in 2023.”  

 

Adam Miller, CEO & Co-Founder of MIDAO: “Since most crypto tokens are assets, in addition to being technology, their adoption is more affected by macroeconomic conditions than other technology.

“It’s hard to predict when the macro environment will turn around, but if history is any guide, it will be cyclical.

“And when the environment turns positive, we should see the greatest explosion of asset value and technology adoption in crypto that we have seen to date.”

 

Matthew Niemerg, Co-Founder, Aleph Zero: “Lacking any other information, I always tell people the same thing: your best strategy is to dollar-cost average purchases no more than you are willing to lose and to forget about it.” 

 

SILVER LININGS FROM 2022?

The year just passed proved difficult for many crypto investors and businesses. But what’s your take? Got some silver linings for us? 

Sean Lee, Co-Founder of Odsy Network: “The successful Ethereum Merge was a massively positive moment for the crypto industry in 2022.

“For the longest time, a primary narrative around blockchain and cryptocurrency — aside from the speculative nature — has been the energy usage in Proof-of-Work (PoW). By shifting from PoW to Proof-of-Stake (PoS), Ethereum dramatically reduced its carbon footprint and removed the target that had been painted on its back.

“A smaller carbon footprint brings a very positive signal to the industry and beyond, showing that blockchain as a technology is rapidly evolving. The successful Merge supports the notion that PoS has a place in the industry, and will continue to be a dominant consensus mechanism moving forward.” 

 

Eric Brown, Co-Founder & COO at Franklin: “One of the major highlights of the year has been the continued growth and evolution of the technology behind crypto. We may joke “in it for the tech”, but I’m constantly impressed by how quickly the technical layer of our industry is evolving.

“The Merge was a huge success and further validated the decentralised and open source ethos of the industry.

“The Flashbots team and MEV researchers everywhere have proposed potential solutions to new MEV challenges posed by PoS and even proposed the ambitious SUAVE to keep crypto’s transaction sequencing layer decentralised.

“Not to mention the advancements in zero-knowledge proofs, which have improved scalability and security.” 

 

Kevin de Patoul, Keyrock: “This year, it was shown that there’s no such thing in crypto as a Too-Big-To-Fail. We are still watching stories unfold with FTX, the flaws of untransparent and centralised systems in crypto exchanges are clear.

“We are at the cusp of re-recognising that exponential growth is by no means equal to a sustainable business model.

“That being said, the industry appreciates players who do not cut corners. As one of the market liquidity providers, we saw tremendous growth and building of bridges between traditional finance (TradFi) and decentralised finance (DeFi) – e.g. Strip integration, JP Morgan uses of Aave on Polygon, and so on.

“For 2023, everyone is getting ready to be back to business with solid plans and deliverables.”

 

Adam Miller, MIDAO: “Despite slowdowns in other areas of crypto, 2022 was actually an awesome year for Decentralised Autonomous Organizations (DAOs).

“The number of people involved in DAOs and the assets under management has seen astronomic growth. More importantly, dozens of companies were started, and funded, to build new DAO tooling. In 2023, these new tools will be critical to onboard more people into Web3.” 

 

Ashton Addison, Crypto Coin Show: “I agree that it’s been a difficult year for crypto with several high-profile hacks and other negative events. However, I do believe there have been some positive developments as well.

“Besides more people understanding the importance of diversification and self custody of digital assets (ie. not your keys, not your coins), many companies continue to integrate innovative blockchain-based solutions into their business, NFT’s continue to grow out into other industries previously untouched by Web3, and DeFi will grow stronger than ever as a superior non-custodial way of trading and managing digital assets.” 

 

Matthew Niemerg, Aleph Zero: “I think the initial pain [in the market] will be short-lived, although the fall-out may last longer than what most want.

“Flushing out bad actors needed to happen, and the regulations stateside that were proposed by SBF will hopefully have more scrutiny and will not pass any time soon given their origins and backers within the industry.” 

 

WHERE DOES CRYPTO GO FROM HERE?

Here’s one we’ve been asking just about every man, woman and doge we talk to in crypto circles. How can the crypto industry fix itself in 2023? What do you think needs to happen?  

Eric Brown, Franklin: “Ultimately, the key to fixing the crypto industry in 2023 is to focus on what makes it great in the first place – providing fast, cheap, and noncustodial transactions that can be accomplished at scale.

“By doing this, we can regain the trust and confidence of institutions and other key stakeholders, and set the stage for a more robust and sustainable market in the years to come.” 

 

Matthew Niemerg, Aleph Zero: “It is hard to say what will be the next catalyst. It’s possible that regulation will provide clarity and bring a resurging interest in both retail and institutional adoption.

“Maybe it will be privacy. Or enterprise applications on public chains. One thing is for sure, the industry is here to stay.” 

 

Adam Miller, MIDAO: “We have to remember that decentralisation is a cornerstone for everything that we’re building in Web3. Let’s avoid enabling more centralised entities and individuals to sabotage and jeopardise everything for those of us who are actually building real value.

With DAOs now able to form legal entities, and thus be treated the same way as any other company, there is no project that cannot be governed by a DAO. Even centralised exchanges can be governed in a decentralised manner through a DAO.”

 

Ashton Addison, Crypto Coin Show: “There is so much innovation in blockchain still, builders just need to keep building. The natural evolution of great product releases and real-world solutions for new industries still untouched by Web3 will fuel the narrative and further real world adoption for the next cycle.

“Institutions realise it’s not the underlying currencies like Bitcoin that are the problem, but the shady business relationships of centralised exchanges and custodians that need to be solved.

“As more institutions continue to enter the space there will be a growing focus on secure asset management practices and more ways to do finance and commerce in a trustless manner.” 

 

Sean Lee, Odsy Network: “Quite frankly, I don’t think a lot of the users fully understand exactly what they’re signing up for when it comes to downloading new wallets.

“So they’re kind of buying into this narrative that now you have to control your assets. So that’s a good thing. But is that going to really lead toward significant adoption of applications that are built specifically with the non-custodial aspects of asset management in mind?

“This will take time to build out, but that’s going to be a major theme going into 2023.”

 

Kevin de Patoul, Keyrock: “From a market maker point of view, in 2023, we should see more OTC types of trading in crypto to minimise counterparty risks. As the industry will keep their eyes more on long-term oriented investments, institutions will simplify the scope of assets to focus on, for example, top 10 performers, in order to minimise risk.

“Monetary gains were put on the pedestal in the last two to three years, 2023, the industry will be more focused on ethos and technologies.” 

 

MORE CRYSTAL BALLING

Any other broad or specific predictions  for the crypto market in 2023? 

Sean Lee, Odsy Network: “2023 will be the year of regulatory conversations, and hopefully, these discussions will bring much-needed consistency across the board. Regulatory consistency and clarity will benefit the entire crypto industry worldwide.

“Regulators have woken up. From my engagement with the Crypto Council for Innovation, we’re seeing all kinds of policymakers starting to ask the really tough questions.

“They have taken time in 2022 to really educate themselves, and you can see many regulators have really up-skilled themselves. At least, they understand the basics, like PoW versus PoS, and so on – but obviously not at the level of understanding that we expect them to be.

“Beyond the US, we’re seeing regulators in Japan, Hong Kong, Singapore, Australia, and more, start to make concerted efforts toward really putting in some guardrails for the sake of consumer protection.”

 

Adam Miller, MIDAO: “2022 was a huge growth year for DAOs, but 2023 will be the Year of the DAO, from a technology, adoption, and regulatory perspective. The technology is finally almost capable of providing a compelling user experience for launching and operating DAOs.

“Furthermore, governments across the world (e.g. Wyoming, Marshall Islands, Israel) are recognising DAOs as the unique and innovative entities that they are.”  

 

Ashton Addison, Crypto Coin Show: “2023 will bring more good and bad parts in the aftermath of the FTX contagion. There will likely be further regulation of digital asset custody, cryptocurrency exchanges, and stablecoins.

“I hope that any regulation passed doesn’t hinder the innovation and create further barriers for players to enter DeFi and digital assets. At the same time, I think DeFi will make great strides in 2023 as a more decentralised and trustless method of global finance, and newer solutions will lower the barriers to entry into DeFi and create more education around safe decentralised finance practices.”

 

Matthew Niemerg, Aleph Zero: “My biggest concern for 2023 would be over-regulation. But I think the broader industry has a better chance of having our voices heard and that lawmakers will be more cautious in favouring select prominent actors.”

 

Kevin de Patoul, Keyrock: “Because of what happened to FTX, we do expect a stricter regulatory environment in 2023 for sure. We also expect the thrive of industry-wide standards that focus on increasing security and transparency of exchanges.

“In addition, institutional onboarding will continue and there will be acquisition of successful crypto companies by traditional players as evaluations have crashed.

“As we saw the danger and lack of custody of crypto centralised exchanges, more trust and interest will be generated towards decentralised exchanges.” 

 

FAVOURITE CRYPTO NARRATIVES?

What crypto/Web3 sectors, narratives or use cases do you most believe in? 

Matthew Niemerg, Aleph Zero: “Privacy; interoperability; NFTs as far as proving unique ownership of an asset, maybe not necessarily profile pictures; DeFi; tokenisation of assets (bonds, corporate debt, shares, real estate, and so forth); and, to be frank, any application that uses any type of database.”

 

Kevin de Patoul, Keyrock: “I absolutely believe in tokenisation of all different kinds of assets, and DeFi as the backbone of centralised financial entities.

“We would love to see the development of on-chain derivative platforms, development of on-chain and off-chain crypto option platforms, and transference of NFTs from art and community tools into new use cases.”  

 

Ashton Addison, Crypto Coin Show: “The case for DeFi is more clear than after the failure of Celsius, BlockFi, FTX and many other service providers that digital assets were meant to be decentralised and under self-custody.

“More investors will opt for decentralised finance for value transfer and storage as protocols become more interoperable and DeFi becomes easier to use.

“Combine this with the increased tokenisation of traditional financial products like stocks, options, and other derivatives and DeFi will eventually become as big as the traditional equities market.”

 

Adam Miller, MIDAO: “DAOs are conceptually not as dependent on token prices as other parts of crypto because they can simply use the blockchain for governance and membership tracking, and they can use fiat currency (or stablecoins) for their activities.

“I expect all of crypto is going to take off as adoption grows, but DAOs will take off irrespective of what happens with crypto asset prices. DAOs represent the latest evolution in how humans organize ourselves and our resources.” 

 

Eric Brown, Franklin: “I believe in the open-source ethos of the industry. The open-source model has been a driving force behind the rapid innovation and growth of the crypto and Web3 space.

“By allowing anyone to contribute to and collaborate on the development of new technologies and applications, the open-source model has enabled the industry to progress rapidly, and has benefited everyone involved.

“It’s a key component of the success of the industry, and I am committed to supporting and promoting open-source development in the years to come.”

 

BIGGEST CRYPTO GRIPES?

What/who irritates you most about the crypto industry and perhaps the Crypto Twitter space? Conversely, what keeps you involved and engaged? 

Ashton Addison, Crypto Coin Show: “While Crypto Twitter enables breaking news faster than most media outlets, trying to filter through sarcastic posts and “sh*tposts” can be confusing and misleading, especially for new users in blockchain.

“For example, after the FTX contagion there was a lot of fear and uncertainty around crypto companies. Anyone could tweet a false statement about a crypto company and then this fake news spread like wildfire not knowing the original post was just a joke.

“However, the growth in activity on Twitter Spaces during the same period has brought the crypto community together and allowed open discussion roundtables where crypto users share more authentically as they are on audio and aren’t just hiding behind their keyboards.”

 

Matthew Niemerg, Aleph Zero: “I think the industry can be too money focused. That is not necessarily a bad thing – of course, money is a motivator and is used for economic incentives whether to pay developers to build applications or as network rewards to provide security and transaction validation on a decentralised network.

“However, if you are here for the money, then you have missed the point of what was being built to begin with – a censorship-resistant and a publicly owned currency that is not issued by central banks or governments and not controlled by anyone. 

“What is important to keep in mind is that the market wants this type of product, and has been clamouring for it for ages – although no one knew the market wanted this until Bitcoin was originally released.

“That’s why the industry has been so successful and why it will not go away. The market demands a solution! And entrepreneurs will provide, and the market will reward them accordingly.” 

 

 

These responses were edited lightly for clarity. The contents of this article do not represent financial advice. 

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