The financial world of the early 2020s had been all about blockchain and cryptocurrency.
From cryptocurrency prices skyrocketing and the institutional endorsement of Bitcoin to the end of FTX and terraUSD, many of the major headlines for the year revolved around the digital currency world.
With media hype dying down, we’re left wondering where the crypto industry stands. In this article, we want to answer the question:
Are we too early or too late to enter the crypto industry?
Is blockchain technology early in development and not yet ready for mass adoption, or was the bull run a false prophet for a technology that will never see the light of day?
This blog doesn’t do clickbait, so although we cannot predict the future, we want to take a data-driven scientific approach to assess the situation.
Coin Market Cap - Is Less More?
While periodic rallies may bring thousands of investors, tons of media coverage, and billions of dollars into the market, consistent and continuous bull runs are not healthy for the ecosystem. They can only last for a limited time. Less market capitalization, investor pressure, and media influence can benefit both the investor and business sides.
For investors, small-cap markets present opportunities. Whereas more significant market cap investments show consistency, safety, and trust – but that’s not where price growth could be found. Small-cap stocks have tremendous growth potential for price growth because the companies have room to grow.
Getting in early on a project may be riskier because of the future’s unknowns, but if you genuinely believe in a project, why not invest in helping it grow? Who knows?
Without the constant pressure to generate profit consistently, developers can focus on creating better, more valuable projects.
Early 2020 saw projects exploiting the blockchain name and tricking individuals out of their money, creating a bad reputation for cryptocurrency and destroying the integrity of many ingenious blockchain projects. With fraudulent schemes and investor pressure out of the way, hoards of developers, project managers, and revolutionary businesspeople have been freed to pursue their goals of building accessible and reliable applications with real-world use cases and creating a loyal, genuine community behind them.
Now that the ivory towers have fallen, we know who’s serious about making the world better.
When Will The Crypto Winter End?
While significant cryptocurrencies finished a disastrous 2022 with a relatively quiet December, Bitcoin seems to have found a floor at around 16k during early 2023.
Amidst the FTX fallout, crypto exchanges have banded together to prove their stability to the public. In the absence of legal egulation, big digital asset exchanges have made it a point to be more transparent with their funds and implement Merkle-tree proofs of reserves, an auditing practice that evaluates and verifies blockchain-logged data through a third party.
As an important step to establish baseline trust in the industry, crypto exchanges have made it a point to be more transparent with their funds after the liquidity crunch faced by the general industry.
That said, the relatively low volumes at which crypto is traded, alongside a stable price floor established after months of falling prices, is a positive sign for the crypto community, as a slower but more solid ascent can be triggered pending a more transparent legal landscape.
Historically speaking, the average crypto bear market lasted about 1 to 2 years and was linked to the downfall of a centralized player, unrelated to the failure of a specific feature that the technology touted.
Contextually, we also have to consider that the past year has seen a drop in crypto prices and everything else. Everything is dropping from National GDPs to local stock markets and housing – as we said in our 2022 crypto bear market recap, it’s an everything winter.
The Future of Crypto In 2023: What are companies doing?
Getting involved with the crypto community is neither too early nor too late. Even though investors continue to wait on regulation, legalese, and a positive Fed outlook before plunging into crypto once again, the best organizations don’t - stop - working.
Here are some of the things to look out for this 2023.
Deeper Integration With Human Processes
History has shown that the best developments are those that lay low and you don’t even realize exist. The trucking industry in the United States, for example, is worth $875.5 billion and responsible for 72.2% of all freight transported in the United States for the year 2021. Who knew that moving an object from one place to another could be worth so much?
Blockchain company Circle, the organization behind USDC, understands the value of covert operations. The company is currently looking at ways to partner with Visa and Mastercard to provide near-instant global payment processes with the help of the blockchain. They say, “you’ll be using USDC without realizing it.”
CBDCs aim to do the same thing. They solve scaling issues and create circumventive systems to improve consumer privacy without sacrificing security. As the blockchain integrates deeper into our current practices, new types of assets, products, and tokenization tools will emerge due to continued use.
Blockchain: innovative not only in name
As we usher in a new year with the learnings of 2022, recent trends and businesses will make themselves known. Adding “blockchain” or “crypto” on your website won’t be enough to attract flocks of investors anymore, you need to show why you are worth investor attention - a revolutionary concept, we know.
This is the renaissance era for cryptocurrency, and only a select few organizations could lead it.
Stablecoin companies, like Circle, are an obvious choice as they present clear solutions to existing pain points. Still, new trends, like digital identities and AI integration, could also take center stage given worldwide awareness of cryptocurrency. Both these industries would greatly benefit from the privacy-centric, certain features of the blockchain.
Digital identities and personal identifiable information stored in large, centralized systems are incredibly appealing to hackers, comprising about 97% of all data breaches in 2018. With the help of the blockchain, customers could now personally own and securely store their data.
On the flip side, blockchain technology could cross-reference and validate images and videos. The release of ChatGPT has scared the public into thinking that AI could soon generate all the content we see on the internet. It’s a valid point; AI can and has replicated a human voice, indistinguishable from it’s organic sources (us). This is where the blockchain can come in.
Through tokenization, blockchain tech could distinguish between AI-created and human-created content without needing a different audience.
Bitcoin Energy FUD
Speaking of new trends, sustainability and green have entered the crypto fray with “Green Bitcoiners” making a trend of sustainable proof of work mining.
Companies like Vespene have started using landfill waste methane to power on-site Bitcoin mining machines. This mechanism has proven immediately deployable and highly scalable while proving environment-friendly.
Bitcoin’s sentiment was primarily hurt by claims of PoW mining’s negative environmental impact. As the face of cryptocurrency, one can understand why this would spoil the overall market.
Could this push for “Green Bitcoin” be the groundbreaking, environmentally-friendly motivation needed for mass adoption?
Going Back To Basics
Finally, in an earlier section, we mentioned how businesses and developers may now freely explore and build better projects without investors breathing down their necks, pushing them to turn a profit.
One thing that developers could revisit is the basic functionalities of their projects. Cryptocurrency, at its core, is a means to safeguard freedom and privacy and provide near-frictionless transactions at lightning speeds in an increasingly globalized world.
Going into 2023, we expect companies to work doubly hard to earn their audience’s trust.
Whether it’s transparency in their books or working in close coordination with the government to come up with clear regulations, this defining period for the blockchain ecosystem will rival that of the post-dot-com bubble, where companies that thrive are those capable of building secure systems and a multi-function, interoperable platform with real-world use cases – like Peccala.