Before we dive into the top crypto predictions for 2023, let’s reflect on this last year.
2022 was a huge turning point for the crypto industry.
At the beginning of the year, we saw hiked interest rates, which led to broad market sell-offs affecting assets considered risky i,e., cryptocurrencies. This market downturn was fueled by the Terra-Luna crash, after which prices further plummeted. And, of course, the FTX scandal was the final nail in the coffin, setting us all up for a long crypto winter.
The total value of all the cryptocurrencies combined fell by more than 70% in the last year. Bitcoin, which at the start of the year was trading at around $40,000, fell well below $20,000 by December.
But it wasn’t all bad. We saw new innovations, new use cases and new ways to integrate crypto and blockchain in mainstream infrastructures. There were also some interesting developments around the legal status of crypto and its tax implications in many countries.
Overall, the crypto space is at a crucial junction right now, and this year might just decide the trajectory it follows for the future years. In light of that view, we’ve compiled the top crypto predictions for 2023.
Some of these are obvious and easy, while others are wild and ambitious. Let’s see how many of these we get right by the end of this year
1. Legal Battles Over Crypto Regulations Around the World
A lot of people have and still point fingers at cryptocurrencies and their underlying technology for crimes like money laundering and tax evasion. Plus, established institutions, like banks, see cryptocurrencies not only as a threat to themselves but the overall economic stability of a country.
The recent drama around FTX and the Terra-Luna crash last year, plus the string of high-profile hacks last year, only adds more weight to their argument. In a situation like this, many governments would want to instill more regulations and control over crypto, some of which will attack one of the fundamental ideas of crypto and Bitcoin – decentralization.
The crypto community is expected to put up a fight as it’s a billion-dollar industry now with a lot at stake. As a result, we can expect more legal battles around crypto regulations, like the Jarrett v. United States lawsuit.
2. Increased Regulatory Clarity Around Crypto
Building on top of the last prediction, we can expect to see more regulatory clarity from different governments around the legal status of cryptocurrencies. This is one of the easy ones in this list of top crypto predictions for 2023.
Many countries that embarked upon cryptocurrency still don’t know what to make of the phenomenon, and most of these countries are yet to have a solid legal framework around crypto and other related assets. The existing laws are ambiguous and lack nuances, with many legal loopholes and gray areas.
For instance, almost all the countries for which we’ve created a tax guide don’t have any clear guidelines on the tax implications of various DeFi activities like staking and yield farming.
However, as more and more users adopt crypto, nations will feel increased pressure to provide clear guidelines to their citizens. Plus, with crypto-related cyber crimes and user fraud skyrocketing, it has now become a necessity.
3. Bitcoin Will Cross $30,000 in the Second Half of 2023
Bitcoin may be down, but it’s not out. Fed rate hikes, one of the primary reasons behind the global meltdown in 2022, might soon slow down, which may make way for Bitcoin prices to rise again.
In fact, Bitcoin is already starting to recover pretty fast after hitting the $16,000 mark following the FTX controversy. As of writing, it’s trading for $21,000, which is pretty good considering the crypto industry went through this last year.
But that is not the primary reason for the long-term rise in Bitcoin prices.
Many institutional investors are taking crypto more and more seriously, and Bitcoin is the first place they will look at when they invest in crypto.
Many small and big companies are also integrating Bitcoin and cryptocurrencies in their businesses, whether it’s by accepting payments in crypto or buying huge Bitcoin reserves, as Tesla did.
Bitcoin stands to benefit from these factors and is likely to cross $30,000 in the second half of 2023.
Definitely not one of the wildest top predictions of 2023, but surely ambitious.
4. More Scams, More Hacks, More Crashes and More Drama
We’ve already mentioned the FTX scandal and the Terra crash multiple times. We also mentioned the overwhelming number of hacks that occurred in 2022, especially in the DeFi sector. Not to mention the countless crypto and NFT scams pulled off by scammers, some of who were well-known internet personalities.
Our prediction for 2023 is we will see more of this. It’s not entirely a positive prediction, but one that is highly likely since most experts believe that the market is still not rid of all the bad actors. So, brace yourself.
5. Crypto Games Will Gain More Popularity
Web3 games, NFT games and play-to-earn games have garnered massive attention in the crypto space lately. It has already acquired funding of billions of dollars and is expected to grow at an astounding rate of 70% over the next few years.
Many of these games already have tens of thousands of daily users. Plus, they have sold billions of dollars in NFTs, which could be something in the game or the game itself.
With widely awaited games like Big Time and Star Atlas set to launch in 2023, either as demos or full-fledged games, we can expect the crypto gaming industry to boom this year.
6. Continued Growth of DeFi
DeFi, as an alternative financial infrastructure parallel to traditional institutions like banks, hasn’t been fully successful yet. We’ve talked about DeFi in-depth here, but to quickly summarize, while it has its limitations, the current state of DeFi is far from its full potential.
After the latest bankruptcy of FTX and BlockFi, users are now turning to decentralized exchanges and wallets to retain more control over their assets.
In 2023, we can expect newer DeFi tools and use cases, more adoption, and with that, overall growth of the DeFi.
7. The Rise of DAOs
Decentralized Autonomous Organizations (DAO) are fully autonomous, public, transparent groups and organizations with no central authority built on smart contracts. As the name suggests, these organizations are run and governed by their own members. No third party dictates its actions and decisions.
So far, DAOs are mostly used in DeFi protocols. But in one of the more improbable crypto predictions for 2023, we predict a rise in companies and organizations (both inside and outside the crypto space) built on DAOs. As a result, we might also get more legal clarity around DAOs.
8. New Use Cases for NFTs
In 2021, we saw the rise of NFTs. Everyone was going crazy over abstract paintings and pictures or bored monkeys. People and celebrities were spending millions of dollars to buy these hyped-up NFTs. However, if you know the fundamentals of investing, you know that hype doesn’t last long.
In 2022, we witnessed the downfall of NFTs. However, there is a key distinction to make here that makes all the difference. The hype of NFTs indeed came to an end, but as many experts suggested, the technology remained.
The NFTs with real utility and value continued to hold their value. Not only this, we saw many artists selling their concert tickets in the form of NFTs. Brands and companies figured out new ways to incorporate NFTs in their marketing and business.
In 2023, we can expect to see the expansion of newer use cases for NFTs.
9. More Countries Will Ban Crypto
Other than the reason that crypto is often held responsible for financial crimes, governments have other strong reasons to fear cryptocurrency.
For instance, no government would want to lose its power, which mainly comes from economical and military influence. But crypto aims to do exactly that – to decentralize power and currency.
However, it doesn’t necessarily make the government bad to not allow complete decentralization of money. The government needs a certain level of control and authority to come in and prevent these crimes, hacks and scams, like the FTX scandal, from happening, as it’s ultimately a threat to us. We can’t expect the government to protect us from something that it has no control over.
Crypto is already banned in nine countries, including China, Egypt, Bangladesh, Nepal, Qatar, etc. Recently, the Indian Central Bank Chief insisted that crypto should be banned as they are a threat to the country.
We hope out of all the top crypto predictions for 2023, this one doesn’t turn out to be true, but it’s very likely that we’ll see more countries banning crypto this year.
10. First CBDC
Central Bank Digital Currency (CBDC) is basically the digital version of a country’s currency. Some experimental versions of CBDCs are already up and running in some countries, including China and India. However, we predict that we might see a full-fledged, nationwide implementation of the first CBDC this year.
And this is not just a prediction based on intuition and feeling, but backed by statistics and facts. We talked about this in-depth here.
Of course, not all, if not most, of these predictions won’t turn true this year. However, almost all of these predictions can turn out to be true in the near future, if not in 2023.
More interestingly, some things will just come out of the blue that we could never predict. So, brace yourself because 2023 might be a year full of surprises for the crypto space.