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| By Jurica Dujmovic |
2023 is lined up to be a decisive year for the crypto industry.
After a tumultuous 2022, experts are divided on what the future holds for crypto. Its supporters predict the worst is behind us and a bright future lies ahead, while its detractors fear its demise.
A big part of our optimism about the near future of crypto is because of what’s happening with decentralized finance. Next week, my colleague Chris Coney will host a special webinar about major opportunities with DeFi in 2023.
That webinar is completely FREE for our Weiss Crypto Daily readers. All you need to do is sign up to save your seat.
But to get a broader understanding of the current state of crypto and its potential in the year ahead, I’ve spoken to three experts and correspondents to get their take on the matter.
Interview No. 1: Tom Norwood
My first guest is Tom Norwood, a veteran entrepreneur who has been developing software since a young age. He has now launched Loop Markets, an ecosystem of products that strive to make crypto accessible and user-friendly for the masses.
Jurica Dujmovic: Tom, in the upcoming year, what do you think will drive the next leg up for the crypto market?
Tom Norwood: If we look at where the new capital inflows will come from, it's unlikely — given the unprecedented amount of fraud and failure we've seen this year — to come from institutional investors. But for the bear market to end, we need inflow from somewhere.
I think that's going to have to come from real-world adoption by retail users who are not buying crypto to gamble on new tokens, but rather who need to exit their local fiat currency, which is now devaluing at a rate some countries have never seen before.
Jurica: Do you think fiat currencies will continue to push people toward crypto?
Tom: Absolutely. Fiat currencies everywhere are now depreciating at record levels thanks to decades-high levels of inflation that are hitting everyone hard — but especially those in developing countries. As average people continue to see the value of the money in their pockets eroding, they will look for other options, of which crypto has many.
While the stablecoin market remains largely pegged to the U.S. dollar, this is a favorable situation for many. And combined with staking and yield opportunities, it makes stablecoins extremely attractive to millions of people in these regions.
Jurica: What do you think is the most promising industry for onboarding new crypto users in 2023?
Tom: With gaming non-fungible tokens, avatars and blockchain-based games, gaming is a ripe recruitment ground for younger users unencumbered by the fear and misunderstanding that surrounds crypto and blockchain for older generations. An industry insider recently told me that through gaming alone, we can expect to onboard 300 million users into crypto and blockchain over the next six to 12 months.
Jurica: Any last thoughts for 2023?
Tom: I think Latin America will start to take off in 2023. As numerous reports have shown this year, the adoption of crypto in LatAm is now soaring. And thanks to the factors mentioned above, this is only going to increase, as shown by the host of conferences held in the region this year — including this year’s biggest Ethereum (ETH, Tech/Adoption Grade “B”) conference in Mexico, as well as Devcon Colombia and Hacker House Bogotá.
Many crypto firms are now focusing heavily on this region.
Finally, I think demand for Bitcoin (BTC, Tech/Adoption Grade “A-“) should continue to grow, regardless of market conditions. That’s because it’s still better than most currencies in that it at least has a good chance of going up eventually, whereas most currencies are just going to depreciate over time.
Interview No. 2: Don Norbury
My next guest this week is Don Norbury, head of studio at Shrapnel, the first blockchain-enabled, moddable, AAA first-person shooter.
Jurica: What’s the most important lesson you’ve learned from the past year in terms of the crypto industry?
Don Norbury: I think the best learning moment from the past year was GameStop's (GME) breakout hit, NFT marketplace, and its comparison to Coinbase's (COIN) lukewarm NFT marketplace launch. This was an eye-opening reminder that specific audiences do matter, and raw numbers — in this case of users and wallets — can create an illusion of success potential.
GameStop has built an audience of gamers and collectors, whereas Coinbase is primarily financial in nature with retail securities traders, and these brands have an enormous hill to climb if they try to service a different audience than their native one.
Jurica: What do you think the landscape of the crypto industry will look like in 2023?
Don: I believe 2023 will be a year of interesting conflict.
On the one hand, we have the industry damage that resulted from largely centralized — and familiar — schemes and bad actors. This will result in a lack of trust for centralized systems and a return to the “not your keys, not your token” mentality.
This is in direct conflict with the industry momentum around incorporating elements such as custodial wallets and familiar account flows that are necessary for the mass adoption of blockchain-backed projects.
Interview No. 3: Christopher Goes
My final guest is Christopher Goes, co-founder of Anoma, a privacy-preserving protocol. As a true believer in crypto and an advocate of the cause, Christopher echoed my sentiments when he shared his views.
Jurica: What did you learn from the events of 2022 in the crypto world?
Christopher Goes: For me, the events of 2022 illuminated the gaping divide between what crypto means to protocol designers, cryptographers, activists and artists and what crypto means to the mainstream media, Wall Street, and the political elite.
To me, crypto refers to the ethos of crafting systems that render relations of trust explicit and designing technology that builds both individual and collective freedom on top of a mathematical basis instead of relying on fallible human institutions.
This is clearly not what it means to the public consciousness, which has been deluged with FTX propaganda, inundated by NFT advertisements and lied to by regulators who don’t understand the systems that they claim to regulate on behalf of the public.
Jurica: What implications does this divide have for the crypto movement?
Christopher: This divide in crypto consciousness is tragic, because it often renders crypto unpalatable to the very people it’s designed most to help. And it’s shameful, because it means that as participants in the movement, architects of alternative systems and citizens in our democracies, we have failed to kick out scammers in our midst, failed to communicate to the public and failed to hold our governments accountable.
Jurica: What needs to be done to ensure 2023 becomes a turning point for crypto?
Christopher: If crypto is to be anything other than a financial fad, regulated out of existence by skeptical gerontocracies trying to act on behalf of the scared pension funds held by their constituents, this must change now — and the first step is to stop measuring success in dollars.
Thank you, Christopher. I couldn’t agree more. Indeed, success should be measured by the impact crypto has in the world, and not just in the markets.
2023 looks to be an exciting year for the crypto industry, with an array of opportunities for new users, projects and investors.
The key to making 2023 a turning point for crypto is to focus on the core values and ethos of the technology — that of freedom, trust and privacy — and to ensure that these are at the center of the conversation.
With the right approach and the right attitude, crypto can have a huge impact in the year ahead and beyond.
All the best,
Jurica
