As the page turns on the chaotic events of 2022, experts discuss what their expectations are for the new busy year in the crypto world, from regulation to price expectations.
The crypto market has proven time and time again to operate at a grueling speed and have a never-ending news cycle, which makes it incredibly difficult to distill it into a few trend-setting points. Instead, investors will have to reflect on the events of 2022 that will significantly affect the new year for crypto.
Here the Investing News Network (INN) presents our outlook on the crypto market for the year 2023.
Expectations rise for progress in 2023
When it comes to the new year, several trends are expected to play a role in crypto’s performance. These are mostly building on the events of 2022, which were at times turbulent to say the least.
One expert told INN the ongoing concerns about the well being of the global economy, such as the effects of a looming recession, will play a key role in how large scale businesses interact with blockchain opportunities.
“What that does open up is organizations that are seriously looking to redefine how they operate, and the pursuit of making the processes better in pursuit of alpha returns,” said Abhishek Sinha, an EY Canada partner and national banking technology leader with the firm.
“I think we’re gonna see far more serious investment and more targeted investment, and on solving real world problems and scaling things,” he said.
Elliot Johnson, chief investment officer and chief operating officer with Evolve ETFs, told INN he expects to see clarity regarding inflation rates early in 2023, which will then “add more certainty to the investment picture for everybody.”
The investment expert said inflation rates will settle down, allowing for risk assets to play up their options to investors.
In a recent interview with INN, Gareth Soloway, chief market strategist at InTheMoneyStocks.com, said he expects to see the price of Bitcoin, the leading cryptocurrency in the world, bottoming out at around US$9,000.
After that he foresees clarity in regulation for the entire market, aiding the prices of cryptocurrencies.
“Once it gets there, I think it’s going to coincide with regulation coming out, and then I think you actually start to see a move back up in Bitcoin,” he noted.
Peter Eberle, president and chief investment officer at Castle Funds, told INN he expects 2023 to be in general a better year than 2022.
“Are we going to retake all time highs? I think that might be too optimistic to say, but I think you’re gonna see a much, much healthier market next year,” Eberle said.
Alex Tapscott, managing director digital asset group Ninepoint Partners, told INN he expects 2023 to be the year bigger enterprises will adopt Web3 opportunities.
Discussion on regulation for crypto market
Following a tumultuous 2022 that featured the collapse of two major crypto exchange projects, investors have been faced with some soul searching as to what the industry will need moving forward.
Clare Adelgren, global sales and operations leader for EY’s blockchain division, told INN there needs to be more checks and balances in order for the industry to become even more mainstream, especially in the financial side.
“Stability doesn’t have to be a bad thing,” Adelgren said.
A reckoning is approaching the industry, according to experts INN spoke to, following the FTX collapse as well as the mounting losses for investors.
For his part, Nick Kuriya, vice president and head of crypto at Purpose Unlimited, said a catastrophe like the FTX scandal was allowed to take place due to a lack of oversight, calling on regulators to step into the industry.
“Regulatory policymakers need to provide some clarity to the industry, because an absence of clarity, what (it) does is it creates risk for anyone that wants to operate,” Kuriya said.
Long overdue increased regulation will be critical for the safekeeping of the digital asset class.
“Most of us that are in this industry believe in good regulation, and it will wipe out the fraudsters,” Eberle said.
When asked how regulation could go down, the investment expert told INN the Commodity Futures Trading Commission (CFTC) should be the regulator in the US for Bitcoin.
“People are always concerned that regulation means stifling the industry. We don’t believe that’s the case,” Eberle said.
The investment expert placed a parallel between crypto and the housing market prior to the 2008 crash. The housing market needed oversight and regulation leading up to and after the historic crash.
“Part of the failures that happened at the time were that they were so unregulated, but once regulation came into the space, more larger institutional investors could trust the marketplace and come in,” he said.
The same could be true for crypto, Bitcoin in particular, Eberle said.
“There are a lot of institutional interests out there that are currently looking for ways to get exposure to Bitcoin… if they had regulatory clarity going forward, then I think they would take direct exposure to Bitcoin, which would be extremely bullish,” Eberle said.
Could overregulation affect crypto?
However, concerns are rising about risks of overprotection and the impact of too strong a hand from regulators.
Tapscott told INN he is sure the market will see regulatory clarity in 2023 but is unsure how it will be received by Web3 enthusiasts, not just crypto investors.
“My view is that we need a legal framework that protects users and promotes innovation,” he said.
Tapscott explained he wishes to see regulation specific to financial protections.
“Any centralized institution that’s acting as a deposit-taking firm and holding assets on behalf of customers needs to be regulated… if it looks like a bank and walks like a bank and talks like a bank, it’s acting like a bank.”
Secondly, Tapscott expects to see regulation in the form of rules breaking up exchange functions from custody and brokerage. He thinks regulation should stop there, in order to not prevent innovation in the space.
As expectations mount for what 2023 could bring, these discussions are sure to play a key role in the progress of the crypto market.
Investor takeaway
Its clear regulation will play a critical role in the path of crypto investments in 2023. Investors will need to be prepared for swings of volatility from discussions around how broad and impactful the role of regulators should be when it comes to digital asset class opportunities.
Don’t forget to follow us @INN_Technology for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
