Now in the year
Far from an exhaustive list, but the following were selected as a direct response to the drama we faced in 2022.
In the year Shocking events of 2022 will generally guide the trends of the coming year.
To catch you up to speed, when FTX collapsed in November, it came at the cost of $8 billion in customer assets held on the exchange.
Whether through mismanagement or theft, Sam Bankman-Fried said the crypto exchange was quickly gambling with user funds and opening high-margin risky positions, and the money was eventually lost.
But he didn’t have to go down that road.
As more sophisticated crypto traders will understand, you don’t need to entrust your digital assets to any exchange. Instead, a simple third-party wallet like TrustWallet lets you take full control of your coins without leaving them at the mercy of bad faith actors.
You can also choose a hardware wallet like the Ledger Nano, which is a small USB-like device that allows you to store your coins offline.
Want to know more about bags? Read here: Top crypto wallets to protect your digital assets
While crypto wallets add more complexity to those getting into crypto trading, they are likely to become more popular as the volatility of crypto exchanges becomes more visible.
Trust Wallet Token (TWT) has been one of the best performing altcoins this year, hitting an all-time high following the FTX crash. Its success could spur a revival of competitors in the new year, so keep an eye out for early investment opportunities.
Can Decentralized Finance Find Capital in SeFi’s Darkest Hour?
Centralized exchanges and credit protocols have gone through a rough patch this year. From FTX to Celsius, Voyager, Blockchain and most recently Genesis, every month seems to bring a new fall for decentralized finance (CeFi).
So, 2023 could be the year when decentralized finance (DeFi) really takes off. why?
When CeFi is irreversibly damaged by trustlessness, a trustless, peer-to-peer financial ecosystem powered only by smart contracts, not humans, will become even more obvious.
But consider yourself warned: DeFi is risk-free. Yes, some dodgy CEO is going to rob you blind, but being a nobody, scams abound, hacking, liquidity issues and slippage problems are common.
That being said, some DeFi protocols are outdated over time and may be beneficiaries of the DeFi revolution.
Uniswap is the top decentralized exchange (DEX) for Ethereum-based DeFi trading, while PancakeSwap is Binance’s leading DEX.
For decentralized lending, Convex Finance and Aave are among the most liquid platforms.
Bitcoin ETFs to go forward?
Greyscale’s US$10.7bn Bitcoin Trust (GBTC) has had a shocking year. The market’s largest bitcoin-only investment vehicle is going for bitcoin holdings at a discount of nearly 50%.
It’s been Grayscale’s long-held ambition to turn its U.S. stock market trust into a spot exchange-traded fund (ETF), but the Securities and Exchange Commission (SEC), led by Chairman Gary Gensler, has shown little interest in approving the move.
Most recently, the SEC sought to quash an appeal from Grayscale’s CEO regarding the transition, further proof that Gensler is unwilling to issue a note.
But could things change in 2023?
Gensler is under intense scrutiny over the FTX crisis, prompting Democrat Richie Torres to ask the US Government Accountability Office (GAO) to review the SEC’s failure to protect the public from FTX’s gross mismanagement and corruption. He said.
Matthew Siegel, head of digital assets research at New York fund manager VanEyck, went so far as to theorize that crypto permabear Gensler could be on the way out in 2023.
A shakeup at the SEC could renew hope for a more liberal approach to bitcoin ETFs, though it’s far from certain that it will be an uphill battle.
One thing is certain: Grayscale is not yet done to install the SEC, and the fight between the two parties may intensify in the new year.
Ethereum is going up.
In the year 2022 was supposed to be the defining year of the Ethereum blockchain. Far and away the largest smart contract platform for token issuance, NFTs, and gaming, has finally completed its much-hyped integration, transitioning from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
Ethereum elites had been waiting with bated breath for a big pump in ETH price, but all their hopes were in vain when The Merge went with a whisper rather than a bang.
And for good reason: While The Merge represented the first step in Ethereum’s massive scalability improvements and fundamentally changed the platform’s consensus mechanism, it didn’t even change transaction speeds or transaction costs — two major avenues to Ethereum scalability.
That could change in 2023 — and maybe even longer.
Without getting too bogged down in technical details, The Merge was just the first in a series of epic upgrades, with more planned for years to come, including The Surge, The Verge, The Purge, and The Splurge.
The Surge update implements two types of technology, sharding and roll-ups, which significantly reduce the transaction cost, increasing it from 15 transactions per second (tps) to 100,000 tps.
At its core, The Surge delivers on the promise that the sequel made in the first place.
As the ecosystem grows, ETH will certainly see strong price action, but other projects will also benefit.
Layer-2 solutions can also increase their Optimum (OP), Arbitrum, and Largest Polygon (MATIC) values. This is because the Ethereum Foundation actively relies on these and similar projects to facilitate network expansion.
Without being too cynical, one needs to ask: Does anyone really care, even if Ethereum becomes hundreds of times more efficient, with the reputation of a cryptocurrency in the toilet?
Wheat from the chaff
Solana (SOL) was one of the biggest losers of 2022 (at least, for cryptocurrencies that didn’t crash completely).
Year-to-date, Ethereum’s supposed killer has dropped 95%, tanking from US$170 to less than US$10.
Unfortunately on stage, 2022 was marred by widespread outages and hacks, leaving FTX significantly exposed to the fallout.
Solana’s downward spiral could be a sign of things to come for major Ethereum options in 2023; While projects that demonstrate real utility, developer engagement, and universal support will hopefully thrive, those that don’t cut the mustard will be left behind.
From big hitters like Cardano (ADA), TRON (TRX), Avalanche (AVAX), and Polkadot (DOT) to Phantom (FTM) and EOS, there are tons of top-performing blockchain networks.
Guessing which projects will take off is a bit of a mug’s game, and if 2022 is anything to go by, no altcoin is safe.
In addition, some of these will be difficult to compete with the increased scalability of Ethereum, but perhaps this is what the cryptocurrency market needs – projects that were built in a bull market were swept out, but did not prove their value in a bear market.
There may be more pain in the first half of 2023, so stay safe out there!