- A long-term approach is being advocated for 2023
- Utility-driven projects could be key in coming months
The year 2022 has been one to forget for crypto enthusiasts, investors, and the industry alike. From mega scams like the FTX debacle, and the crypto meltdown to the fall of goliaths like 3 Arrows Capital, crypto got a bad name for itself in 2022 and it seems there isn't any light at the end of this dark tunnel (at least for this year). With so many occurrences affecting the volatility of $BTC, where do you think the price is headed in 2023?
As we get closer to welcoming 2023, there is a sense of anxiety amid the crypto community about what's in store for various stakeholders. Will the crypto bellwether, Bitcoin, be able to survive this barrage of brickbats? Which other projects will capitulate and is there anything to look forward to in crypto?
Pressing questions like these have been living rent-free on the minds of many, which is why I thought of getting some answers from the horse's mouth.
The year 2023 could be a window of opportunity for crypto to have an image makeover. A sector that at times has been castigated by policymakers and branded as "extremely volatile", a "Ponzi scheme" and even a "scam", needs to win back the faith of the people. I understand that 2022 has been plagued with headlines around crypto scams and 'pump and dump' schemes, but experts believe 2023 could be a bit different for crypto.
Seemingly, the focus could shift to projects that have a sustainable model and most businesses that were looking at a short-term profit could be shown the door. Rohas Nagpal, who is the Chief Blockchain Architect at Hybrid Finance Blockchain, believes that projects like Cardano, Polkadot, Solana, Tron, Avalanche, Ethereum Classic, Algorand, EOS, and Flow could see a continued decline in 2023.
"Some of them will probably not live to see 2025. I also expect to see the rise of privacy-enhanced cryptocurrencies like Monero, Zcash, and Dash.", he added.
Jayjit Biswas, Founder of the Elite Web3 Forum in India, believes that only good projects like Bitcoin and Ethereum will survive to maintain their 2022 value level.
Also, the economic slump is predicted to continue in 2023 which is another reason for businesses to look toward long-term projects for investments. Jayjit also believes that if the global economy can sustain the pressure of recession, crypto can bounce back up to a maximum 20 percent from present levels.
I suppose a more conscientious path to restoration can begin with a balanced approach toward regulation.
Push for self-regulation & transparency
While the proliferation of fake cryptos and NFTs has exacerbated the overall situation, industry experts opined that regulation in this sector can help restore some parity. With self-regulation and a transparent legal framework for crypto in India, various stakeholders could have the liberty to build and invest with more confidence.
A key event that will decide the future of crypto in India is the 2023 Union Budget. Finance Minister Nirmala Sitharam has been vocal about a coordinated global effort in regulating crypto, and 2023 could see India lead the way in that department. Another factor that could make or break it for crypto is taxation policy.
A 'trustless' ecosystem
Despite its technological prowess, crypto has many chinks in its armour. While mega scams like FTX have only made things worse, crypto-related businesses across the globe have struggled throughout the year to maintain operational costs due to a vertiginous fall in crypto prices and the overall negative sentiment. Could things be different in 2023?
Besides crypto, blockchain technology also needs to receive a push from investors and the government. Recently, a bevy of private equity firms decided to leverage blockchain technology to reach affluent investors and also to provide a less-cumbersome process to invest. This is just one of the many examples where blockchain tech is being deployed to make the lives of investors easier.
The battle wages on
While the Reserve Bank of India has been hard-nosed regarding its anti-crypto stance and has been pushing the digital Rupee aggressively, crypto will have to battle it out to remain relevant in an ecosystem where it’s still looked at with suspicion.
While Indian crypto investors weren’t hit as hard by scams like FTX due to the stringent tax regime in the country, it is expected that scammers will continue their relentless pursuit to exploit some of the weaknesses in centralised and decentralised projects in 2023. Therefore, the need of the hour is to focus on bolstering the current crypto infrastructure.
Expect the unexpected
Crypto has survived all these years. It has shown resilience and 2023 could be another chapter in its struggle to be relevant.
While economic factors will affect the growth of this ecosystem, regulation will play a pivotal role in shaping how crypto will be integrated into the current financial infrastructure. Not to mention that the end user and people like us need to find utility in crypto and not see it as just a quick money-making tool.
Regardless of what fate befalls crypto, experts and crypto firms are optimistic and 2023 could be a game-changer for the cryptoverse. What do you think?