What could trigger change in the crypto sector in 2023?

Unfortunately, the bear market was the most remarkable event in the crypto sector in 2022. However, even in the given circumstances, the rate of digital currency adoption increased, making experts believe that the trend will continue in 2023. 58% of institutional investors purchased digital assets the previous year through exchange platforms like Binance, which allows them to check Bitcoin price easily and keep an eye on all cryptocurrencies’ evolution. A report from 2022 shows that the demand for crypto payments increased over the last few months, and around 48% of millennials consider digital currencies a viable method to purchase products and services. 

A survey among retailers shows that 75% of them intend to introduce cryptocurrency payments in the near future. If this is the case, crypto adoption will have great significance for the sector’s evolution. 

This article explores the factors that could trigger a change in the crypto sector in 2023. 

Expanding regulations could power a broader crypto adoption

2022 brought a series of events in the crypto sector that left the call for stringent regulations regarding digital assets, and various governments worldwide intend to develop sets of rules to provide frameworks for investors. Regulations aim to lower the level of risk investors expose themselves to, encourage broader adoption of digital coins, and build confidence in the sector. For example, the Biden administration called for clear and more strict regulations in the crypto sector after the FTX collapse to protect investors. It sent a series of recommendations to Congress on how to develop policies that could protect national security and investors and ensure long-term financial stability. 

Therefore, if governments worldwide formulate well-crafted frameworks for trading cryptocurrency, they can encourage the development of a healthy crypto sphere. Regulations could minimize the number of bad actors in the industry and make the market less prone to manipulation, which would turn it into a more reliable sector people would trust. Consequently, the development of regulations could trigger crypto adoption at a more rapid pace by institutional investors. 

South Korea and Japan are examples of countries that proved crypto economies are beneficial as long as strict regulations are in place. 

Institutional investors turn their attention toward digital currencies

Besides crypto regulations, crypto investments could also bring change in the sector. Institutional investors have been turning their attention toward digital currencies over the last few years, which triggered an increased adoption of digital assets by several industries. The bear market has challenged some beginner investors, especially in 2022. However, seasoned investors foresaw the crypto winter and don’t fear continuing their market investments because they recognize its potential. Surveys show that 62% of institutional investors have increased the amount of resources allocated for buying digital assets because they expect their valuation to increase in the long term, even if the bear market still affects the sector. 

According to a survey, by the end of 2022, around 58% of the companies that took part in the research held digital assets. The number of institutional investors increased by 6% from 2021 to 2022, despite the market entering a negative phase, which signals that the sector could witness a long-term uptrend of cryptocurrencies. 

The South Korean Government allocated $300 million in funds to be invested in metaverse projects, and a UK banking leader invested $2 billion to become a partner in a crypto custody firm. 

This could only mean that organizations have gained more confidence in investing in the crypto sector, and their involvement can accelerate the mass adoption of digital assets.  

Web3 adoption

Web3 technologies have advanced rapidly over the last few years, bringing new opportunities for organizations from all sectors (from manufacturing to finance, all industries could benefit from the integration of Web3). Experts believe that more organizations will want to explore new models of customer touch points and commerce in 2023 to power growth. 

Surprisingly over the last couple of years, blockchain technology and digital currencies have gained popularity in the luxury industry, influencing it in more than one way. For example, famous luxury brands like Equinox, Gucci, and Off-White have adopted crypto payments to address a broader range of customers and accommodate the market’s ever-evolving requirements. Luxury travel and watch companies Travala and Hubolt have also adopted the crypto payment trend to enable their clients to purchase services and products via Bitcoin and other major digital coins. 

And crypto’s influence doesn’t stop here because the development of Web3 enables it to stir the luxury industry even further. Other major brands from the fashion sector (Dior, Louis Vuitton, Givenchy, and Nike) have also embraced Web3 opportunities and joined the metaverse. 

Web3 and cryptocurrencies could benefit the luxury sector in 2023 and beyond because they boost transparency and give the public the freedom to opt for the payment method of choice.

DAOs and gaming are in full ascension

News announces that some long-waited Web3 games (which have been in development for a while), like Ember Sword, Star Atlas, and Big Time, will be launched in 2023. While some will only be available as playable demos, the others will be launched as full-fledged games. 

In addition, decentralized autonomous organizations are predicted to register accelerated growth, even if 2022 forces the industry to a break. As more people understand how they work, more individuals and institutional investors will be interested in exploring these digital assets. Subsequently, the crypto sector will scale up and conquer new lands. 

In addition, a series of crypto trends have proved the industry’s potential to grow in several ways, and the push in regulations could win more investors. Investors from all industries are seeing digital assets’ long-term potential and have started to allocate more resources to the sector, even during the bear market. Blockchain technology and digital currencies have proved that they have the power to enhance the customer experience in numerous areas, and especially in the luxury industry.