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Consider the last year. Bitcoin was trading at $50,000, you couldn’t watch sports without seeing a cryptocurrency advertising, and you could get rich – or so it seemed – by minting a non-fungible token (NFT) of your left nostril.

Who could have forecast the demise of Celsius Network and Voyager Digital at the time? Or that Matt Damon’s name would become a crypto joke? Or that Sam Bankman-Fried, space’s golden kid, would go from Anakin Skywalker to Darth Vader?

All of this is to suggest that there are no crystal balls. Predictions are frequently incorrect. Trends may shift in an instant. But, after the FTX-flavored sadness of the previous two months, perhaps speculating on 2023 is just what we need to clear the palette.

According to Jamie Burke, CEO and founder of Outlier Ventures, what happens with crypto investment in Q1 2023 will be key in determining whether we remain in a protracted bear market. On the one hand, he says that the venture market has remained strong, with billions of dollars still streaming into the field and significant levels of capital awaiting deployment, and that “we have had a record number of applications in our most recent cohorts for 2022.”

More bleeding, more deaths, and more agony.

“The infection is far from done,” says Cas Piancey, co-host of the “Crypto Critics’ Corner” podcast. Piancey believes that “businesses, banks and funds are urgently hoping the market gets beyond the FTX and Alameda collapse or simply concentrates on their misconduct,” but whether individuals like it or not, “you can’t wish away a credit crunch and exposure to problematic counterparties. We will witness the closure of funds and the failure of enterprises that we did not predict, largely because the contagion is too wide and too difficult for us all to estimate.”

Perhaps an emphasis on living outside of cryptocurrency/bitcoin/blockchain.

When asked regarding his predictions for 2023, bitcoin bull Peter McCormack, presenter of the “What Bitcoin Did” podcast, simply stated, “Real Bedford will win the league.” Obviously, this is a joke (McCormack bought the team in 2021), but it may have a kernel of truth: During crypto winter, it’s useful – even healthy – for those in the industry to focus on other hobbies.

Don’t dismiss NFTs.

“The continued high-risk appetite in NFT-funding in 2022 is a strong signal that it will be among the first sectors to rebound following year,” Burke adds. “Over the past year, we’ve already seen significant NFT investments from large Web2 businesses [Starbucks and Disney] and throughout Web3…” This shows no signs of abating.

The large exchanges are “disaggregated.”

“Exchange stack is disaggregated – we see custody, brokerage and exchange/price discovery get separated out into multiple entities, much as in [conventional finance]. This makes another FTX unfeasible,” argues Haseeb Qureshi, managing partner at Dragonfly Capital.

“When trust is low, incumbents consolidate,” Qureshi predicts. People are less inclined to trust smaller and weaker businesses, therefore Coinbase, Binance, and Uniswap will likely gain market share in aggregate. “Network effects become more powerful.”

Gaming and DAOs are expanding.

Burke is also optimistic about gaming, predicting that “prominent Web3 game titles that have been in production for quite some time, such as Big Time, Star Atlas, and Ember Sword, will finally see the light of day in 2023, either as full-fledged games or more playable demonstrations.”

What about DAOs (decentralised autonomous organisations)? “Although it may appear that the present weak market has paused the sector, the rise of new DAOs has accelerated tremendously, with each month in 2022 creating more new DAOs than the whole year of 2021,” Burke adds.

Web3 is becoming popular.

“When it comes to Web3 acceptance, fashion will continue to lead the way,” says Cathy Hackl, chief metaverse officer at Journey. “We’ll see more collaborations between Web3 celebrities and consumer and luxury businesses looking to experiment with new commerce models and customer touchpoints.” “With the growth of generative AI, we may see blockchain play a big role in helping us discern between material made by AI and content created by humans,” Hackl adds.

Bitcoin acceptance is truly worldwide.

Alex Gladstein, the Human Rights Foundation’s chief strategy officer, had just returned from a bitcoin conference in Ghana when I chatted with him. “I was blown away,” Gladstein recalls. “I was astounded by the sheer quantity of bitcoin entrepreneurs and leaders from all around the world.” He encountered individuals from Cameroon’s countryside, the Democratic Republic of the Congo, Somalia, and crisis zones. “They’re all simply constructing on bitcoin. “It’s quite incredible,” he adds, adding that “global adoption is certainly the number one story for next year.”

Web3 platforms are expanding.

“Larger macroeconomic downturn market circumstances should ideally drive crypto initiatives away from speculation and more towards utility – one big utility category just being meaningful, entertaining, social interactions,” Alex Zhang, the de facto leader of Friends with Benefits DAO, forecasts. He anticipates growth in “interoperable identification, on-chain social networks, and crypto-abstracted social experiences,” as well as “more meaningful Web3 social platforms and protocols.”

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