The new year is here and the previous one has been quite a challenge for the crypto sphere on all imaginable fronts. From the imploding prices to the heavy burden of the FTX collapse, the entire ecosystem has been placed under the most sustained and serious pressure since the bitcoin network went live in 2009. As 2023 begins, causes for optimism are far and few between. Many in the same investment circles are simply in an accumulation mode, believing that the present low prices will keep on dropping, faster or slower, but with a pretty certain trajectory.
On the other hand, a series of macro factors are all pressing hard on the global economy as a whole and these too are dampening any possibility of a quick or strong recovery. Furthermore, many in the development community believe strongly that 2023 is going to be even worse as a whole in the crypto space, which is why so many are working almost exclusively on improving their services. For them, the possibility of generating new revenue streams or appealing to new users is practically impossible. But, even though all dangers for the crypto space are more than valid, there are still some important and relevant opportunities that might take shape in the coming year as well.
Adoption by Institutions
The adoption of cryptocurrencies by institutions such as banks and investment firms could be a key driver of growth in the cryptocurrency industry in the coming years. While 2023 stands a small chance of an institutional boom, the possibility is definitely there. As more large institutions begin to explore the use of these digital assets and the underlying blockchain technology, it could increase the perceived legitimacy of cryptocurrencies and make them more appealing to a wider audience. Additionally, institutions have the resources and infrastructure to invest in the development of cryptocurrency-related systems and platforms, which could improve the overall ecosystem and make it easier for individuals and businesses to use and transact with cryptocurrencies.
The involvement of institutions in the cryptocurrency market could also help to increase market stability and reduce volatility, making cryptocurrencies more appealing to a wider range of potential investors, including those who may be more risk-averse. All of this shows why the adoption of cryptocurrencies by institutions has the potential to significantly contribute to the growth and development of the cryptocurrency industry in 2023.
Technological improvements in the cryptocurrency industry could also drive its growth in the near future. The tech behind cryptocurrencies, particularly the blockchain as its core feature, is constantly evolving and there are many ongoing efforts to improve it. For example, there are ongoing efforts to improve the scalability of cryptocurrencies, which refers to their ability to handle a large number of transactions without slowing down. Scalability is an important factor in the adoption of any payment system, and if cryptocurrencies can improve in this area, it could make them more appealing to a wider audience. In addition to scalability, there are also ongoing efforts to improve the security of cryptocurrencies.
As with any financial system, security is a critical concern, and if cryptocurrencies can demonstrate a high level of security, it could help to build trust in the industry and drive wider adoption. Other technological improvements that could drive the growth of the cryptocurrency industry include the development of new use cases for blockchain technology and the creation of more user-friendly interfaces for interacting with cryptocurrencies. Right now, every project, no matter if it is an esports league based on a digital token or a banking plugin that uses crypto, is expanding its tech base. A 2023 breakthrough in any of those domains could be a great boon to the recovery process.
Increased Everyday Use Cases
Increased use cases for cryptocurrencies and blockchain technology could drive the growth of the cryptocurrency industry in the future and even in the early parts of 2023. That is directly tied to the tech breakouts that are possible in the same period. As more businesses and organizations adopt these technologies – even institutions – the number of use cases for them will likely increase, which could lead to more people becoming interested in cryptocurrencies and investing in them.
Some potential use cases include using cryptocurrencies as a secure and efficient way to make everyday payments, using blockchain technology to track the movement of goods through the supply chain, using cryptocurrencies and blockchain technology to securely verify the identity of individuals online, and using blockchain technology to create tamper-proof records. As more use cases for these technologies are developed, it could increase their appeal and drive their adoption. Once more, the market volatility will make that a hard sell in the coming 12 months, but as the tech expands, the appeal will grow too, if not by huge leaps.
The final possible opportunity for crypto is the green energy boom that will continue in the coming year. Cryptocurrency networks could potentially benefit from renewable energy solutions in a number of ways. One of the main benefits is that renewable energy sources, such as solar and wind power, are much more sustainable and have a smaller environmental impact than fossil fuels. This could be important for cryptocurrency networks, as the energy consumption of some of these networks is a source of controversy due to the high levels of energy required to power them. By using renewable energy, blockchain networks could potentially reduce their carbon footprint and mitigate some of the criticism surrounding their energy usage – that would benefit even networks like ethereum, which moved away from the proof-of-work system.
Additionally, using renewable energy could also help to reduce the costs of operating a cryptocurrency network, as the price of renewable energy is generally more stable than fossil fuels and is expected to decrease over time. Finally, using renewable energy could also help to improve the decentralization of cryptocurrency networks, as it could enable miners to operate from a wider range of locations, rather than being concentrated in areas with cheap access to fossil fuels. This is going to happen no matter what in 2023 because of economic pressures. Because of that, crypto companies are looking to combine both into a more beneficial solution.