Big trends to watch in the crypto universe in 2023

The past year has been particularly difficult for the crypto world. The bankruptcy of US platform FTX, which collapsed within days in November, has permanently depressed cryptocurrency prices, with bitcoin down 75% since its peak a year ago. And the domino effect of this bankruptcy “may not have come to an end”, underlines KPMG, author of a report on “Crypto Outlook” was introduced in January.

The auditing and consulting firm explores the developments that could happen in 2023 in the crypto planet. First of all, he notes that the computer protocols of Bitcoin and Ethereum confirm their position as leaders, “one as a neutral and alternative currency”, decentralized and not controlled by a state, the other as a programmable reference blockchain. , in which more than 600 applications have already been developed.

And this trend should continue to strengthen this year. Bitcoin can benefit from the ongoing geopolitical instability and economic difficulties of some countries: “It is in countries in crisis, like Ukraine or Lebanon, that Bitcoin mainly demonstrates its value proposition”, believes Stanislas Barthelemi, consultant at KPMG. Many Lebanese turned to cryptocurrencies when banks prevented their customers from withdrawing their funds. Cryptocurrencies, borderless and difficult to censor, allowed up to $100 million in donations to be quickly transferred to Ukraine at the start of the war with Russia.

Bitcoin, a competitor to traditional currencies and payment systems

Bitcoin could further benefit from the growing competition between currencies, exemplified by Saudi Arabia’s willingness to accept the yuan for oil trading alongside the dollar. Cryptocurrency: “It could see its country grow internationally, as a means of cross-border payment and as a neutral and inalienable currency”assures KPMG.

Finally, the Bitcoin blockchain should see continued technological innovation in its infrastructure, with the possible arrival of stablecoins on its network, these relatively stable cryptocurrencies that replicate the price of a currency such as the dollar. These stable currencies, linked to Lightning Networka technology that allows transactions to take place quickly and at scale on the Bitcoin network can compete with traditional payment systems.

Decentralized finance is booming on Ethereum

Ethereum, for its part, remains the reference block for new crypto projects and should still attract new companies. Its potential competitors are trying to get out. Some encountered significant difficulties last year, such as the numerous service outages recorded by the Solana blockchain. The success of alternative chains is “unlikely” according to KPMG, given the level of adoption of the Ethereum network.

It is specifically on this blockchain that decentralized finance (DeFi) is being developed. DeFi brings together a whole host of applications, allowing for example to raise your crypto capital or crypto-asset loans between individuals without going through an intermediary like a bank. Booming, DeFi represents one of the key trends to watch in 2023. Still off the radar of regulators, it is rife without the institutional players that can really capture it.

The European Union has to tackle a new text on DeFi, following the adoption of the MiCA regulation which regulates players offering services around crypto-assets. This new decentralized finance still has “many areas for improvement”, especially in terms of cyber security, KPMG points out.

NFTs and metaverses are not dead

Another key trend to watch this year: NFTs and metaverses. “Victims of overintermediation in 2022”according to the consulting firm, they remain “an innovation vector that attracts companies in various industries”.

Non-fungible tokens (NFTs) grew disproportionately in the first half of 2022, before experiencing a 90% drop in trading volume. But the number of users continued to grow, especially through the platform The open seaindustry leader.

Beyond media stunts, the French unicorn Sorority, specializing in NFT cards bearing the image of athletes, illustrates the success these digital tokens can achieve. In the gaming and luxury sector in particular, companies continue to position themselves and develop strategic thinking around the use of NFTs.

As for metaverses, they attracted a lot of interest from companies last year, but their added value sometimes seems “vague and misunderstood”notes Stanislas Barthelemy. “Many have a technological core based ultimately only on virtual reality”without adopting the tools offered by blockchain, such as the notion of digital property.

Emerging a sustainable business model in the metaverse will take time. Gamification of the user experience looks particularly promising. Owning the virtual land within a metaverse should allow brands to create a new channel “to enrich and personalize customer relationships”, explains KPMG. In the short term, the metaverse however struggles to draw crowds in the long term.

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