Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
In the new year, there is a general expectation that the aftermath of the FTX bankruptcy will spill to other companies over time.
Dear readers welcome to another episode of our widely read Coinspeaker Advent Calendar. Many investors believe the year 2022 is arguably the most tumultuous one, and they may be right for thinking so. But what will 2023 bring to the crypto market?
Crazy Crypto Year
When China banned cryptocurrencies in mid-2021, the move was seen as an unsettling one for the broader digital currency ecosystem. While the industry recorded a bearish sentiment following the regulation, the broader market bounced back from the lows the regulation created when Bitcoin (BTC) rose above $68,000 in November of last year.
This year took a new momentum with the strain the global economy took with the advent of the war in Ukraine. While this war already had an impact on the industry, the de-pegging of the algorithmic stablecoin, TerraUSD (UST), and the absolute collapse of Terra (LUNA) compounded the crypto winter that fueled the collapse and bankruptcies of many crypto unicorns.
Some of the firms that went under in that first wave of crypto winter include Celsius Network, Voyager Digital, Three Arrows Capital (3AC), Zipmex, and Vauld Group amongst others. With the series of implosions at the time, much lost faith in the industry but drawing on the resilience of the technology and the presence of High Networth Individuals (HNIs) or corporate investors in the space has helped to hold down the forte.
While there was no observable super growth in the industry this year, there was much evidence to show that the industry had recovered from the lows of the crypto winter as recorded in the second quarter. Then came the FTX saga that saw the second-largest digital currency exchange file for bankruptcy.
The FTX implosion can best be tagged as the straw that broke the Camel’s back and eroded the appreciation of many cryptos including BTC and Ethereum (ETH) this quarter.
The Fate of Crypto Journeying into 2023
Many people believe that the digital currency ecosystem may continually experience liquidity turmoil until it attains much-coveted maturity. In the new year, there is a general expectation that the aftermath of the FTX bankruptcy will spill to other companies over time.
Whether or not there is direct exposure to FTX, the caution and the conservative approach of investors can further elongate the crypto winter into the first quarter of 2023.
Besides the outlook of the industry as it pertains to trading, other trends are bound to take the center stage next year. We are bound to see more crypto payment integrations by global eCommerce firms as we saw this year. While many brands ventured into the Web3.0 and metaverse scene with the launch of their own Non-Fungible Token (NFT) collections, the year 2023 is bound to be defined and characterized by the advancement of Play-2-Earn (P2E) gaming, active metaverse applications, and more related innovation are bound to take the center stage.
Based on the events of this year, we are bound to see more defined regulatory measures put in place by authorities around the world. In all, Venture Capital funding will not seize, however, it will be limited only to startups with proven fundamentals to remain sustainable over time.