Cryptocurrencies and blockchain, the technology behind them, are here to stay. 2022 was a rough year for the cryptoverse but still, a record $7.4 trillion was settled in stablecoins during the crypto winter. That’s a $ 1 trillion increase from 2021 and overtaking even the total transaction volumes made by payment solutions, Mastercard.
The world is wondering what the future of crypto looks like – will decentralized finance completely replace the popular payment giants? Or will there be some kind of compromise? Check out our top 15 predictions for crypto we’ll likely see in 2023 and beyond.
- In the coming years, we might see a huge surge in the following crypto trends like Ether outperforming Bitcoin, DeFi 2.0 being normalized, and the growth of Web3.
- Cryptocurrencies with real life utility will become the most valuable
- The major challenges to crypto adoption include regulation, security and trust
- Stablecoins will likely be the first cryptocurrencies to be adopted worldwide
- The value of all existing cryptocurrency is around $804 billion, with around $320 billion of that being attributed to Bitcoin (as of Jan.3, 2023), according to CoinMarketCap.com.
- The global online payments market was $6.75 trillion in 2021, according to Research and Markets.
Top 15 Predictions for The Future of Crypto
1. Web3 Will Become The Future of Crypto
Web3 has been called ‘the internet of the future’. The web3 universe contains every single innovation built on the concepts of decentralization – crypto, NFTs, smart contracts, decentralized autonomous organizations (DAOs) the blockchain, the metaverse, and also other innovations like AI, the internet of things (IoT), and immersive experiences.
- In the internet of the future, decentralization is the theme, powered by the blockchain.
- Financial transactions will be permissionless and truly borderless.
- Applications will be decentralized and not controlled by a central authority
- Popular social media platforms will be used by anyone without getting suspended.
- Decisions in organizations and teams will be powered by votes rather than a few elites.
Web3 and crypto
My prediction for crypto is that it will be the money of the future and will power all transactions in the web3 universe. That’s as obvious as it gets. Cryptocurrencies, especially stablecoins are already overtaking traditional fiat in transaction volume on some payment platforms and wherever the money goes, people follow. Bitcoin is also the most widely accepted cryptocurrency in the world.
People want decentralization in every aspect of the web3 universe and crypto will be the new money that’s free of vetting processes, payment delays, held funds, etc.
2. Crypto Regulation Will Become the Next Big Battle
Crypto is revolutionary and has no doubt ruffled so many feathers. However, critics of crypto have strong points to use – hacks, big exchanges filing for bankruptcy, false claims of enough real assets to back tokens in circulation. In fact, 2022 was one of the worst years for crypto yet – investors lost over $ 2 trillion in 2022 alone.
Many critics have called for more regulation over the crypto universe to protect users and investors. But on the other side of the ring, crypto enthusiasts insist that regulating crypto would defeat the very purpose it was created for – decentralization. We predict that 2023 will be the year when the battle for ‘crypto regulation or not’ will hit its crescendo.
Events that have sparked the calls for crypto regulation
- The Luna/Terra USD (UST) crash was one of the first crypto mayhem in 2022, wiping $60 billion and pulling down Celsius, Three Arrows Capital, and Voyager, three other crypto companies in its wake.
- Later in the year, the U.S government sanctioned Tornado Cash, an ETH mixing tool designed to increase privacy for users.
- And at the end of 2022, one of the worst crypto events happened with the crash of FTX, the second largest crypto exchange at the time, losing $ 8 billion of customers’ money and falling from a valuation of more than $32 billion to less than $ 1 billion in a week.
3. No More Meme Coins
Meme coins are cryptocurrencies made after popular internet memes and comics. Unlike the regular ‘serious’ coins built with a clearly defined purpose and functionality, meme coins are just created for the hype and are supported by rather enthusiastic and exuberant followers.
Our prediction for 2023 and beyond is that meme coins will become extinct. They need to. Cryptocurrency projects have a very high failure rate but meme coins, in particular, rarely make it a year on the market. In order for the world to take crypto seriously, meme coins will have to exit the stage.
Any new token being launched should have real utility and make a real contribution to the crypto universe… and not just be based on hype. The lack of utility of meme coins is what makes them extremely risky to trade. With these fancy coins trimmed from the market, investors can focus on real tokens with a real potential for growth and drive the global adoption of crypto.
4. New and Immersive Web3 Platforms Will Be Introduced
The Metaverse – a shared virtual world where we’ll interact with each other, play games, buy and sell, attend concerts, work, etc. from the comfort of our homes.
Web3 and the metaverse will go hand in hand and so will crypto. Our prediction for the future of decentralization is that new immersive platforms will be created and people will start to experience the Metaverse gradually before it becomes the whole world’s reality.
And where crypto will come in? All transactions, game rewards, sales, salaries, etc. will be paid in cryptocurrency. This is the main reason why the global adoption of crypto is very important.
5. DeFi 2.0 Will Become The Future of Finance
The main purpose of cryptocurrencies is to power decentralized finance (DeFi) where users can store and exchange value directly without the need of an intermediary financial institution. Decentralized finance has been around for a while since Bitcoin and allowed people to do more with crypto than just buy and sell.
However, decentralized finance has had its fair share or challenges namely:
- Poor scalability: Many decentralized finance platforms are built on the Ethereum network and congestions are frequent, resulting in slow transactions and high fees
- Not decentralized enough: The concepts of decentralized autonomous organizations (DAOs) are still not yet being implemented for the most part
- Lack of liquidity: Liquidity issues have been a major concern in traditional DeFi. Fund are split on different networks and once staked, are usually tied down and cannot be used for any other thing
- Poor security and knowledge: Many people trying out DeFi don’t have enough knowledge and often get involved with financial instruments they don’t understand fully well.
DeFi 2.0 – The Future
DeFi 2.0 is the next generation of decentralized finance focused on solving the issues of DeFi 1.0, democratizing crypto use, and opening up more use cases for crypto and the blockchain in finance.
6. People Will Become Comfortable With the Idea of Losses
Cryptocurrencies, especially new projects are some of the most volatile assets of all financial markets with some tokens increasing in value by hundreds and even thousands in just a day. Trading cryptocurrencies is very risky and investors can either make a lot of money or lose a lot of money without a solid trading plan.
For crypto to be adopted worldwide, people have to become comfortable with the fact that the value of their portfolios will change every time and learn to be patient. Panic sells when the price of a token starts to fall is one of the leading factors of most projects failing.
Crypto – you win; you lose
In the future, we see people learning to hold on for dear life and getting losses, whilst trading responsibly. Even stable cryptocurrencies like Bitcoin and Ethereum have significant changes in price. Stablecoins, on the other hand, can give investors a safety net and protect their investments if they feel the assets they are trading may fall in price significantly.
7. Ether Will Go on Par With Bitcoin
Bitcoin and Ethereum are the two largest cryptocurrencies by market share. At the time of this writing, BTC trades account for about 40% of the total crypto market share while Ethereum accounts for about 17%, according to CoinGecko data.
The Bitcoin network has served primarily to power decentralized finance and BTC is basically the most widely accepted ‘crypto money’.
The Ethereum network, on the other hand, supports smart contracts and decentralized apps and other technologies have exploded on it. Most NFTs too are hosted on the Ethereum network.
Ethereum vs Bitcoin
Our prediction for 2023 is that the Ethereum market share will catch up with that of Bitcoin and maybe even overtake it. Note, we don’t mean the price of ETH and BTC being equal as that’s unlikely at least for now. BTC is finite and scarce while ETH does not have a minting limit.
8. Bitcoin and Ethereum Will Be Adopted Globally
Continuing on the last point, we are strongly bullish on the adoption of Bitcoin (BTC) and Ethereum (ETH) being adopted globally as the new money. And it’s already happening. The main issues plaguing global crypto adoption are speed, security, the slightly higher barrier to entry, recent bad crypto events, etc.
The crypto community is working tirelessly to resolve these and the Ethereum network in particular continues to evolve to meet the needs of its users. Stablecoins too are making a strong case for themselves as the crypto equivalents of regular money.
Stablecoin trades currently account for 12% of the total crypto market share and the total trading volume overtaken transactions on many popular payment platforms.
Despite the massive crypto scandals and amount of money lost, people are trusting crypto more, especially the two leading coins and stablecoins and are using them more than ever to make transactions.
9. Bear Market Will End (And May Even Disappear)
2022 is easily one of the biggest crypto winters yet and was such a let down from 2021. In 2021, most major coins hit their all time highs – BTC ($68k) and ETH ($4891). Crypto projects were launching faster than we could count them and the market was booming.
Then 2022 came and it’s been all bears. Towards the end of 2022, Bitcoin went below $20,000 since the end of 2020.
The major drivers for the crypto bear market were the Terra/LUNA crash, the new Omicron virus, the FTX crash, the FED increasing interest rates, etc. In all, over $ 2 trillion was lost in 2022.
Will the bear become extinct
Our prediction for 2023 is that the bear market and a healthy bullish run will begin. We believe the worst days are behind us… hopefully. We also predict that only solid crypto projects will stand the test of time and eventually, as confidence increases and global adoption comes, bear markets will become very rare as crypto becomes the new money.
10. Web3 Will Cater to Industries like Fashion, Clothing, Gaming, and Makeup
It’s been predicted that the Web3 industry will completely revolutionize the fashion, gaming, and makeup industries. For the fashion industry, many brands are using the transparency of the blockchain to assure their users of the ingredient sourcing.
Digital fashion is also now the rave and Web3 will allow self-taught designers to enter the industry with no barrier. NFTs can help brands tag their products so telling original from fake is easy. Users of fashion and makeup products can make decisions on how the products should, through the power of DAOs. And quite apparently, more of these brands will begin to accept cryptocurrency as a valid payment method.
For the gaming industry, immersive play will be the new thing. VR gear will allow players to experience the game in new dimensions and feel every moment.
11. Web3 Gaming and DAOs Will Grow
The Web3 revolution has revolutionized the gaming industry with new play-to-earn games all the rave. And we predict that in 2023 and beyond, we’ll see even more web3 games born. In web3 gaming, players collect items and treasures that are completely unique and are made as NFTs.
The most appealing aspect of web3 gaming is that unlike traditional gaming, the items players collect can be transferred into the world and sold for cryptocurrencies or actual money. Also, these games are built on decentralized models, meaning updates, upgrades, game changes and other important features are not controlled by a single entity.
We also predict the increased adoption of the decentralized autonomous organization (DAO) model. Users want to have more control over the platforms and services they use and DAOs allow them to do just that. Instead of a single entity making decisions on how these platforms work, in the DAO model, users can buy the organization’s native tokens (think like shares) and get voting power.
So whenever there’s a big decision to make, members with tokens can cast votes and the majority wins.
12. NFTs Hype Will Decrease
NFTs, short for non-fungible tokens, are cryptographic assets that are completely unique from any other asset in the blockchain ecosystem. Every single NFT has a unique ID that makes it distinguishable from any other NFT. Because NFTs are unique and can be distinguished from other NFTs, they are called ‘non-fungible’. Fungible assets, on the other hand, are indistinguishable and can be exchanged – e.g: regular money, cryptocurrencies like Bitcoin and Ethereum, etc.
NFTs can represent digital assets like art, music, etc or even deeds to real-life assets. While NFTs have been around for a while, the bull run of 2021 brought the biggest NFT boom. Many fan clubs were formed around NFTs, Jack Dorsey (NFT founder) sold a photo of his first tweet as an NFT for $2.9 million while Beeple, a popular artist sold his 5000-art collection (Everydays: The First 5000 Days) for $69 million.
NFTs with utility
Like with many crypto projects, most NFTs get their value from hype and don’t have any real-world value. We predict that in 2023 and beyond NFTs only for hype will fade out. However, we also predict that the push for NFTs with real-life utility will get stronger where NFTs aren’t just hyped art but can be used in real life.
13. Bitcoin Will Outperform the S&P 500
The S&P 500 short for Standard & Poor’s 500 Index is a market index of the top 500 publicly traded U.S companies and is regarded as one of the best indicators of how the stock market itself is performing. The S&P 500 is one of the most widely traded stocks in the world.
While this is merely a prediction, we see Bitcoin, the premier cryptocurrency in the world eventually outperforming the S&P 500 sometime in the future as crypto becomes widely accepted around the world.
14. Web3 and AI Generated Virtual Influencers Will Appear
Artificial Intelligence has experienced rapid growth over the last half decade and AI tools are become increasingly adopted by individuals and businesses around the world. The most popular AI tool at the time of this writing is ChatGPT, an AI chatbot trained to give detailed responses to instructions and queries.
Other AI tools have also been popping up and a popular trend is virtual influencing where the software creates videos featuring realistic AI-generated avatars saying whatever the user instructs it too. These avatars can be lookalikes of real people or completely unique.
In 2023, we predict the appearance of virtual influencers where AI-generated characters with unique personalities will be the face of many brands and help them increase their reach and audience engagement. These AI-generated avatars are getting more and more realistic and are sometimes hard to distinguish from a real person.
15. Companies Will Move Towards Decentralized Finance
Decentralized finance and crypto-powered payments have been around for a while but businesses are still treading the waters carefully, thanks to the many failed crypto projects the industry has seen.
However, in 2023, we predict an increased adoption of crypto as a payment method for customers and users and the rise of crypto payment solutions like crypto cards, etc.
More and more people are using cryptocurrencies – the popular ones like Bitcoin and Ethereum, and stablecoins for transactions and businesses will have to adapt.
Why Crypto Might Be the Future of Currency
Crypto promises a future many are excited about. While others say it’s just another bubble waiting to burst. So, which is it?
Will crypto eventually become widely accepted and even replace fiat? Or will it become ‘something that almost happened’? It’s hard to say but here are some reasons why crypto may be the future money:
Crypto as legal tender
Bitcoin is now officially a legal currency in El Salvador and the Central African Republic. This is a huge step for the crypto industry as the number one issue it faces is adoption. The more countries adopt crypto as legal tender, the more likely it becomes official world money.
Crypto regulations are on the rise
One major reason crypto adoption has been falling behind is the lack of regulation. Crypto itself is deeply rooted in decentralization and distributed control, and crypto regulatory practices and accreditation are lacking to say the least. This lack of regulation is also the main reason why many crypto projects have failed thanks to false claims, inexperienced teams, etc.
To solve this, countries are slowly setting the tone for the future of crypto regulation to ensure people’s investments are protected and ensure credibility. The U.S is doubling down on crypto regulation and has set up a committee led by the U.S Treasury Secretary and the chairman of the Securities and Exchange Commission.
Crypto as a payment method
As an extension of the first point, many businesses and services are now accepting cryptocurrencies as a payment method – namely Bitcoin, Ethereum and other stablecoins. Wikipedia, Microsoft, AT & T, Burger King, KFC are some of the most popular brands in the world now accepting Bitcoin as payment.
Other crypto payment solutions are also coming up including crypto debit cards, crypto payment apps, and crypto payment gateways, helping more people use crypto as money.
Why Crypto Might Not Be the Future of Currency
However, there are also reasons why crypto may not be the future money. And the case against crypto is strong. Here are some of them:
Crypto regulations are going to be the main driving force for business-level crypto adoption. Many people want to know that if any project should fail, there are government-influenced systems in place to secure their investments.
While the move for crypto regulation is already being made in some countries, in other regions like China, Iraq, Egypt, and Algeria, crypto is banned completely. This means the chances of worldwide crypto regulatory practices put in place are slim or are still far off.
Crypto may make moving illegal funds easy
One main case against cryptocurrency is that makes moving money around easy – even illegal funds. Crypto payments are truly cross-border and while every transaction is public, the user identities are protected to a good extent.
- One of the biggest crypto crimes was the Bitfinex hack where two individuals tried to launder $4.5 billion worth of cryptocurrency stolen in 2016.
- In 2022, Ukraine also seized funds in a crypto wallet that was used to sponsor the Russian invasion in the country.
While authorities have been successful in catching most big-profile illegal crypto transactions, many may still go under the radar. A strong case for crypto, however, would be that any currency (including regular fiat) can be used for illegal activities.
Crypto has had its fair share of scandals
The crypto industry has also suffered huge blows and many people are losing their trust in cryptocurrencies and exchange platforms. The Terra/Luna crash and the FTX crash are two events that wiped billions of dollars in investments from the market. In 2022 alone, over $ 2 trillion was lost as prices fell too.
Many people feel that the generally unregulated space of crypto is a haven for hackers and bad actors to whisk away their hard earned money and this is a major stumbling block to adoption.
Crypto is still unstable
And finally, many businesses are still skeptical to accept crypto in exchange for their goods and services because crypto is very volatile. Prices on cryptocurrencies can change by the day, by the hour and even by the minute, so when it’s time to convert their tokens to fiat, the value may have dropped.
Until the main cryptocurrency pairs eventually achieve equilibrium and are stable, many businesses will still rather use fiat and regular money for their transactions.
Will Stablecoins Become the Future of Crypto?
Stablecoins are one of the most important cryptocurrencies and are tokens tied in value to fiat currencies like the U.S dollar, European Euro, and British Pound. So 1 stablecoin = 1 ($, €, or £). Stablecoins are basically crypto versions of regular fiat and give investors the stability of regular money while still allowing cross-border transactions.
The two most popular stablecoins are Tether (USDT) and USD Coin (USDC). Asides from Bitcoin and Ethereum, these stablecoins are the most likely to be globally adopted first and in fact, the total stablecoin trading volume overtook Mastercard transactions last year. I personally get paid in USDT and USDC for my services and exchanging them for regular money is as easy as it gets.
I believe that stablecoins will be the future of crypto for people and businesses who want to make regular transactions and not invest in crypto per se.
The crypto ecosystem is here to stay and has resiliently survived really bad times – and 2022, was a stormy year for the industry. As we move into 2023, many experts believe that the extended bear market will be flipped on its head by the bull.
So what’s the future of crypto? Increased adoption and the natural selection of only high-value crypto projects which will in turn lead to a renewed trust in decentralization and the blockchain. To get there, however, we’ll need increased regulation to attract industry-level investments in crypto.
In the future we see the most stable cryptocurrencies (Bitcoin, Ethereum and other stablecoins) eventually becoming legal tender in many countries around the world and new innovations to enable seamless crypto transactions.