2023.

Bitcoin and liquid staking protocols lead crypto resurgence in Q1 2023

The first quarter of 2023 saw Bitcoin outperform traditional assets after a 72% quarterly gain in market capitalization.

The cryptocurrency ecosystem has enjoyed a buoyant start to the year as Bitcoin (BTC) and decentralized finance (DeFi) protocols surge in market capitalization through the first quarter of 2023.

These are the key takeaways from the “2023 Q1 Crypto Industry Report” published by CoinGecko on April 18. BTC emerged as the best-performing asset of Q1 2023, with gains of 72.4%, outperforming the likes of the Nasdaq index and gold, which marked 15.7% and 8.4% gains, respectively.

The report highlights that all major asset classes saw gains through the first quarter of the year, barring crude oil, which dropped by 6.1%. This decline was attributed to United States inflation data, which cited a reduction in oil demand and the ill effects of the U.S. banking crisis.

*Bitcoin has been the best-performing asset through the first three months of 2023. Source: CoinGecko*

The wider cryptocurrency markets have enjoyed a quarter of resurgence, with the overall market capitalization reaching $1.2 trillion at the end of Q1. CoinGecko highlights a 48.9%, $406 billion gain from the cryptocurrency market cap of $829 billion at the end of 2022.

The DeFi space was another standout performer, rising by $29.6 billion in value through the first quarter. The report cites the impressive performance of liquid staking governance tokens, which saw a 210% increase in market cap since the start of 2023.

Ethereum’s Shapella upgrade played a major role in driving the increase of capital flows into liquid staking pools, with the network’s upgrade finally unlocking ETH staking reward withdrawals. The report notes that liquid staking is now the third-largest category in the DeFi sector.

While Bitcoin and DeFi have been major movers thus far this year, the top 15 stablecoins saw their market cap drop by $6.2 billion. CoinGecko attributes this 4.5% drop in market cap to the shutdown of Binance USD (BUSD) by Paxos and the temporary depeg of USD Coin (USDC) during the collapse of Silicon Valley Bank in March 2023.

Tether (USDT) strengthened its position as the largest stablecoin by market cap in 2023, adding $13.6 billion since the start of the year, while USDC and BUSD recorded market cap losses of 26.9% and 54.5%, respectively.

Nonfungible token trading volume has also surged again in 2023, marking a 68% rise from Q4 2022 to $4.5 billion during the first quarter of 2023. NFT marketplace newcomer Blur accounted for the majority of NFT trading volume since its launch in October 2022, accounting for 71.8% of the market share in March 2023.

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Inside the World Economic Forum: Circle, Ripple reflect on Davos 2023

A handful of cryptocurrency industry players who took part in workshops at the World Economic Forum Annual Meeting paint a picture of increased collaboration within the space in 2023.

Key figures from the wider cryptocurrency space painted a picture of increased dialogue and collaboration at the World Economic Forum Annual Meeting in Davos.

Cryptocurrencies and blockchain technology remained but a small part of the projects and initiatives discussed and workshopped at the annual WEF conference high in the Swiss Alps. However, an increased number of sessions focused on the sector suggests that the wider world is looking for synergies between traditional finance and decentralized finance.

This theme emerged from a number of interviews conducted by Cointelegraph during January’s conference in Davos. Senior executives from XRP issuer Ripple and USD Coin (USDC) stablecoin firm Circle highlighted the importance of embracing solutions and systems that are creating tangible utility and value.

Circle and Ripple had a bird’s eye view of the wider crypto and blockchain conversation in Davos, given their participation outside the WEF conference at a myriad of crypto-focused events like Blockchain Hub Davos and GBBC’s Blockchain Central.

More than a Ripple

Ripple’s team rented out office space in Davos to conduct meetings and business during the WEF conference. Cointelegraph met Ripple’s APAC managing director, Brooks Entwistle, inside their Davos hub to discuss the firm’s involvement at this year’s conference.

Entwistle painted an interesting picture as an individual who has been to past WEF Annual Meetings in different roles for different companies and organizations from as early as 2009. The presence of crypto and blockchain industry participants has come to the fore in recent years, as Entwistle explained:

“What you notice over time is the crowd changes, the promenade changes and, certainly with crypto over the past few years, that has been the case. In May [2022], you could not walk down the promenade without being offered a Bitcoin pizza.”

However, the prolonged downturn across conventional and cryptocurrency markets, coupled with seismic events like the collapse of FTX late last year, has made a noticeable mark on the number of crypto ecosystem participants that set up shop at the conference in 2023.

The Managing Director of @Ripple, @BrooksEntwistle, took a moment to speak to our reporter @gazza_jenks about what’s to come for the company and $XRP in 2023.#CTWEF23 #davos2023 pic.twitter.com/kxmLMIxz03

— Cointelegraph (@Cointelegraph) January 20, 2023

The likes of FTX, who had a stall at the conference last year, were nowhere to be seen. Instead, blockchain infrastructure providers like Filecoin and Hedera had a notable presence, alongside the likes of Circle. Other firms maintained a presence outside the conference at their own event, like CV Labs’ Blockchain Hub and, at Davos’ Hotel Europe, GBBC’s Blockchain Central.

But Entwistle drew a silver lining around the decreased number of crypto stalls along the promenade, suggesting that more fruitful dialogue has been possible at the WEF conference:

“It’s definitely more muted now, but we’re actually having a really good WEF. With some of the noise and hype gone, the conversations and ability to go deep present more of an opportunity.”

Ripple’s APAC head highlighted his belief that progress was being made in terms of dialogue and understanding of crypto given that the number of panels within the event had increased from two sessions in 2022 to seven in 2023, stating:

“If you think about the two parallel tracks, the industry pushing the agenda outside on the street, around Davos and around the region and then what’s going on inside. That infiltration over time, why it’s important, why regulators and banks need to talk about it, and why it should be a broader topic than just what’s happening at a night cap here or a panel there along the promenade.”

Whether there should be more representation from the crypto and blockchain ecosystem inside WEF is a more complex question to consider. Entwistle believes topics with a broad reach outside of the crypto ecosystem need wider representation with projects, protocols and tools that offer value and insights into vexing global issues. He added:

“You need all those different forms represented, but I also think we have to use those slots wisely, use the panels wisely when you do get in front of this group and make sure that people understand real-world utility.”

Entwistle said the “general thrust” of crypto conversations inside the WEF Annual Meeting was focused on why the industry exists and what it’s building. For Ripple, that has been cross-border payments and liquidity provision. Other crypto proponents have been driving conversations around blockchain-based CBDCs and carbon credit initiatives.

While a more specific discourse took place at the WEF Annual Meeting, conversations and business between TradFi and DeFi flowed freely along the Davos promenade. Cointelegraph moderated a number of panels during the week, one of which involved mainstream banks Bpifrance and Arab Bank discussing TradFi’s relationship with the industry.

A key takeaway was the fact that both these traditional financial institutions were offering cryptocurrency custody services for private clients, clearly showing that TradFi is already exposed to the asset class. Regulatory and process controls remain hurdles, but the industries are already cross-pollinating on their own terms.

What remains to be seen is whether the cryptocurrency and blockchain space will continue to camp out along the promenade in the years to come. Entwistle thinks that may well be the case, given the proximity and ability for the sectors to intermingle, stating, “I would expect that Web3, crypto, blockchain, if we do our job and convince the world that we are actually needed, and we certainly believe we are, that we’ll have a place at the table for a long time here.”

Coming for Circle

Cory Then, Circle’s vice president of global policy, said he’d seen a lot of idealistic individuals trying to cooperate and marshall resources in a way that would benefit the world economy.

Speaking to Cointelegraph after moderating a panel at Hotel Europe, Then highlighted the importance of exploring the role of blockchain-based payments systems like Circle with regard to the future of finance and global payments:

“We’re out there talking to policymakers, we’re talking to traditional companies outside of tech, who are looking at using USDC as a payment solution, we’re talking to tech companies, to figure out how we might integrate with the work that they’re doing. We’re talking to humanitarian organizations.”

According to Then, Circle has had hundreds of conversations with policymakers from the European Union, the United Kingdom, Japan, Singapore, Mexico and more as USDC continues to become more readily available as a stablecoin solution.

Cointelegraph’s @gazza_jenks got to speak with @circle‘s Head of Global Policy @ThenCorey regarding the utility value of stablecoins and the value $USDC brings to fast settlement in the TradFi world.#WEF #Davos2023 #CTWEF23 pic.twitter.com/6WPBLd1gWr

— Cointelegraph (@Cointelegraph) January 19, 2023

Key drivers around adoption were focused on how decentralized payment systems can help large swaths of unbanked people around the world. Then said that stablecoins can improve financial systems and inclusion in areas that are largely unserviced by banks and financial institutions:

“You have a phone. You download a personal wallet onto that phone. And next thing you know, you have access to a payment mechanism that is quite reliable and you can get U.S. dollars or you can get Euro coins.”

Then suggested that continued utility offered by protocols, platforms and institutions in the sector and less “betting on price fluctuations” would drive further inclusion.

Driving collaboration in a fragmented world

Brett McDowell, chairman of Hedera, also gave his perspective having been involved both inside the WEF conference and along the promenade in Davos.

Hedera’s institutional, open-source decentralized network is used by a variety of enterprises, universities and Web3 organizations globally. The proof-of-stake blockchain platform’s “performance-optimized” Ethereum Virtual Machine (EVM) smart contracts allow for the creation of diverse Web3 applications and ecosystems.

McDowell told Cointelegraph that the impression of fragmentation between the WEF conference and the crypto and blockchain ecosystem was understandable, but highlighted his own experience of continued collaboration:

“As someone who was privileged to be on both sides of the fence this week for those conversations with leaders of the industry and the World Economic Forum directly, the conversation is a lot more fluid than it looks.”

McDowell said that the WEF’s ability to assemble stakeholders from different industries that might otherwise be separated from one another was invaluable, bringing policymakers to the table alongside private and public enterprises. He added:

“The WEF has unparalleled convening power. Blockchain and crypto is really about building trust layers, anchoring truth and then using cryptography to ensure truth over time on immutable ledgers. That’s why it’s about trust and it starts with relationships.”

The environmental, social and governance (ESG) framework, a focus of the WEF, is another sector that could leverage the many applications of blockchain technology and cryptocurrencies. As McDowell explained, “This is trust technology. It’s the perfect backbone for ESG applications at scale and that is what we need, we need network effects.”

The Hedera chairman said that the WEF was actively considering blockchain-based tools and applications to tackle topics like climate change and power digital economies and tokenization of assets.

The organization might still be at a stage where it is learning about the power of these relatively new technologies, but the growing discourse inside the World Economic Forum emerged as a positive takeaway from Davos 2023.

No ‘respite’ for exploits, flash loans or exit scams in 2023: Cybersecurity firm

The industry is likely to see “further attempts from hackers targeting bridges in 2023,” while users are urged to be warier of their private keys.

The new year is a fresh start for malicious actors in the crypto space and 2023 won’t likely see a slowdown in scams, exploits and hacks, according to CertiK.

The blockchain security company told Cointelegraph its expectations for the year ahead regarding bad actors in the space, saying:

“We saw a large number of incidents last year despite the crypto bear market, so we do not anticipate a respite in exploits, flash loans or exit scams.”

Regarding other ill-natured incidents the crypto community might face, the company pointed to the “devastating” exploits that took place on cross-chain bridges in 2022. Of the 10 largest exploits during the year, six were bridge exploits, which stole a total of around $1.4 billion.

Due to these historically high returns, CertiK noted the likelihood of “further attempts from hackers targeting bridges in 2023.”

Protect your keys

On the other hand, CertiK said there will likely be “fewer brute force attacks” on crypto wallets, given that the Profanity tool vulnerability — which has been used to attack a number of crypto wallets in the past — is now widely known.

The Profanity tool allows users to generate customized “vanity” crypto addresses. A vulnerability in the tool was used to exploit $160 million worth of crypto in the September hack of algorithmic crypto market maker Wintermute, according to CertiK.

Instead, wallet compromises this year will likely come because of poor user security, CertiK said, stating:

“It’s possible that funds lost to private key compromises in 2023 will be due to poor management of private keys, bar any future vulnerability found in wallet generators.”

The firm said it will also be monitoring phishing techniques that could proliferate in the new year. It noted the slew of Discord group hacks in mid-2022 that tricked participants into clicking phishing links such as the Bored Ape Yacht Club (BAYC) Discord hack in June, which resulted in 145 Ether (ETH) being stolen.

Last year, $2.1 billion worth of crypto was stolen through just the 10 biggest incidents alone, while 2021 saw $10.2 billion total stolen from Decentralized Finance (DeFi) protocols, according to peer security firm Immunefi.

The biggest incident in 2022 — and of all time — was the Ronin bridge exploit, which saw attackers making off with around $612 million. The largest flash loan attack was the $76 million Beanstalk Farms exploit and the largest DeFi protocol exploit was the $79.3 million stolen from Rari Capital.

What to expect from crypto the year after FTX

Users are still seeking to move their funds away from centralized exchanges, paving the way for blockchain-based alternatives to thrive.

Cryptocurrency had its Lehman moment with FTX — or, perhaps, another Lehman moment. The macroeconomic downturn has not spared crypto, and as November rolled around, nobody knew that we were in for the collapse of an empire worth billions of dollars.

As the rumors of bankruptcy began to take hold, a bank run was inevitable. Sam “SBF” Bankman-Fried, the once effective altruist now under house arrest, continued to claim that assets were “fine.” Of course, they were not. From Genesis to Gemini, most major crypto organizations have been affected by the contagion effect in the aftermath.

The problem with exchanges like Binance, Coinbase and FTX

Time and time again, the feeble layer of stability has been broken down by the hammer of macroeconomic stress in an atmosphere of centralization. It can be argued that centralized systems grow quickly for the same reason: They value efficiency over stress tolerance. While traditional finance realizes economic cycles in a span of decades, the fast-paced nature of Web3 has helped us appreciate — or rather scorn — the dangers posed by centralized exchanges.

The problems they pose are simple yet far-reaching: They trap skeptical and intelligent investors in a false sense of security. As long as we’re in a “bull” market, be it organic or manipulated, there are far fewer reports to be published about failing balance sheets and shady backgrounds. The drawback of complacency resides in precisely the moment where this fails to be the case.

The way forward, for most people who got hurt by the FTX collapse, would be to start using self-custody wallets. As retail investors scramble to get their crypto off centralized exchanges, most of them need to understand the scope of the centralization problem. It doesn’t stop with retail investors parking their assets in hot or cold wallets; rather, it simply transforms into another question: Which asset are you parking your wealth under?

Often hailed as the backbone of the crypto ecosystem, Tether (USDT) has come under fire numerous times for allegedly not having the assets to back its users’ deposits. That means that in the case of a bank run, Tether wouldn’t be able to pay back these deposits and the system would collapse. Though it has stood the test of time — and bear markets — some risk-averse people might not push their luck against a potential depeg event. Your next option is, of course, USD Coin (USDC), which is powered by Circle. It was a reliable option for crypto veterans until the USDC associated with the Tornado Cash protocol was frozen by Circle itself, reminding us once again about the dangers of centralization. While Binance USD (BUSD) is literally backed by Binance, a centralized exchange, Dai (DAI) is minted after overcollateralized Ether (ETH) is deposited into the Maker protocol, making the stable system rely on the price of risky assets.

There is also a counterparty risk involved here, as you have to take the word of auditors when they say that a particular protocol has the assets to return your deposits. Even in the bull run, there were cases when these assessments were found unreliable, so it makes little sense to outright believe them in such trying circumstances. For an ecosystem that relies so much on independence and verification, crypto seems to be putting up quite a performance of iterative “trust me” pleadings.

Where does that leave us now? Regulators eye the crypto industry with the wrath of justice, while enthusiasts point fingers at multiple actors for leading up to this moment. Some say that SBF is the main culprit, while others entertain the hypothesis that Binance CEO Changpeng Zhao is responsible for the undoing of trust in the ecosystem. In this “winter,” regulators seem convinced that human beings and the protocols they come up with require legislation and regulation.

Users leaving FTX, Binance, Coinbase and other exchanges is cause for hope

It is no longer a question of whether the industry should abandon centralized exchanges. Rather, it is a question of how we can make decentralized finance (DeFi) better in a way that doesn’t infringe upon privacy while also reducing the current notions of it being the “Wild West.” Regulators — alongside investors — are awakening to the refurbished idea of centralized organizations collapsing under stress. The wrong conclusion to derive would be that centralized exchanges need to be more tightly regulated. The optimistic and honest one is that they need to be abandoned in favor of DeFi at a much higher pace.

DeFi has been developed to avoid these risks entirely. One such method is to develop agent-based simulators that model the risk of any lending protocol. Using on-chain data, battle-tested risk assessment techniques and the composability of DeFi, we are stress-testing the lending ecosystem. DeFi offers the transparency needed for such activities, unlike its centralized counterparts, which allow funds to be obfuscated and privately rehypothecated to the point of collapse.

Such monitoring can be done in real-time in DeFi, allowing users to have a constant view of the health of a lending protocol. Without such monitoring, insolvency events that have taken place in the centralized finance industry are made possible and can then go on to trigger a cascade of liquidation as the daisy chain of exposure crumbles.

Imagine if all of FTX’s assets were being monitored in real time and shown in a publicly available resource. Such a system would have prevented FTX from acting in bad faith to its customers from the start, but even if there were too much uncollateralized leverage that would lead to a collapse, it would have been seen, and the contagion would have been mitigated.

A lending system’s stability depends on the collateral value that the borrowers provide. At any point in time, the system must have adequate capital to become solvent. Lending protocols enforce it by requiring the users to overcollateralize their borrows. While this is the case with DeFi lending protocols, it isn’t the case when someone uses a centralized exchange and uses immense amounts of leverage with little to no collateral.

This means that DeFi lending protocols, specifically, are protected from three main vectors of failure: centralization (i.e., human error and humans falling to greed from conflicts of interest), lack of transparency and undercollateralization.

As a final note to regulators, moving away from centralized systems doesn’t absolve them of the responsibility — or eradicate the necessity — of regulating even decentralized spaces. Given that such systems can be regulated only up to a certain extent, they’re much more reliable for decision-making and predictability. A code will reenact its contents unless a systemic risk is found within it, and that’s why it’s easier to narrow down on particular codes and come up with regulations around them rather than believing that each human party will act in the interest of the group at large. For starters, regulators can start stress-testing DeFi applications regarding their transaction sizes and transparency.

Amit Chaudhary is the head of DeFi research for Polygon. He previously worked for finance firms including JPMorgan Chase and ICICI Bank after obtaining a Ph.D. in economics from the University of Warwick.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

10 predictions for crypto in 2023

Expect blockchain adoption to increase in the year ahead — in addition to the culture wars surrounding it.

This year has been a particularly tumultuous one for the crypto market, with many decentralized and centralized entities failing or struggling to stay afloat. It feels as though we are in the final stages of the bear market, with bad actors and practices being purged in a process that is both dramatic and necessary for the maturity of the entire system. Despite this, the Web3 technologies that emerge from this crypto winter will change everything.

Web3 represents the next evolution of information exchange, with similarities to the transformation from a largely agricultural society to a more industrial one. It is a computing fabric that is designed to put humans at the very center and prioritizes privacy. Blockchain technology will bring about a new way of interacting with the internet and will fundamentally change how we engage with each other. As we move into the future, here are some predictions for what we can expect to see on the other side, in 2023.

1) Crypto venture capital funding will continue to decline through the first half of 2023, but that is not necessarily a bad thing; rather, it is normalizing to a point that is rational. Investors don’t want to catch a falling knife, so they are waiting for things to bottom out while also weighing broader macroeconomic concerns and the global recession risk. At the same time, new settlement (layer 1s/2s), interoperability (layer 0/bridge), lending and trading protocols will continue to get funded to fill the vacuum resulting from the changes resulting from the recent hacks, treasury shortfalls, regulatory changes and exchange collapses.

2) In 2023, the initial Web3 anarchist ethos that rejected the need for big brands will go away. Participants will finally realize that when there is no outside money from big brands, then all you have is a token whose only value comes from user and speculator dollars. Instead, projects will embrace large brands and the ad, marketing and sponsor dollars they bring so that the dream of Web3 (token representing microequity) can be achieved via divvying up meaningful outside capital among actual users. Web2 brands — such as Nike, Starbucks and Meta — will continue to experiment in Web3, with a continued focus on nonfungible tokens (NFTs) as the preferred format, and with an emphasis on customer acquisition and engagement over monetization.

3) People will realize that the way many have been thinking about community in Web3 is bullshit. “Community” was often simply a lovely word used primarily to describe “a bunch of speculators in a Discord sharing a common dream of rapid wealth who abandon the project once the growth carousel stops moving.” While we’ll continue to see exceptions to the rule — such as strong, engaged decentralized finance communities, as well as online-to-offline decentralized autonomous organizations like LinksDAO — what we’ll realize in 2023 is that the whole Web3 ideal of project/community fit was frequently just project/speculator fit. So, we can’t afford to ignore the fundamentals of actual product/market fit.

4) As Web3 app development costs go down and user acquisition costs go up, there will be an emphasis on quality and discovery. Web3 will have its App Store and AdMob moments, which will help developers and users find each other more efficiently. L1s and wallets will initially compete for this position, but a new player will likely take over. Breakout Web3 apps in 2023 will look more like the top-downloaded and top-grossing apps in the early days of mobile — simple user experience and graphics with intuitive but innovative engagement and monetization mechanisms — like Angry Birds in 2009.

5) The current trend toward “stability” and “sustainability” in games — in some ways resulting from the bumps of Axie Infinity — will spawn a wave of products with built-in stability but that lack the dynamic boom-and-bust nature of most crypto speculation. This will create a flat, muted player experience, which just feels like a copycat version of existing Web2 video games. Over time, game developers will relearn that market speculation is part of the fun and try to incorporate it in healthy, responsible ways.

6) Web3 will continue to offer a solid niche, with apps that are functionally clones of existing businesses, but with some basic blockchain components. These apps will carve out a market niche of users who want that same traditional core product offering but have some affinity for Web3, similar to many early internet companies (such as Amazon as a web bookstore) or mobile companies (such as Robinhood as a mobile stock trader). They will differentiate largely on marketing and experience rather than on core product offering. A few of them will take moonshot bets at truly paradigm-breaking innovation, a la Amazon.

7) To deal with compliance costs and overhead, blockchain apps will increasingly rely on existing, large-capitalization tokens to power token-related mechanisms. Ethereum will continue to delay its roadmap in 2023, but once it does eventually ship sharding to reduce gas fees, alternative L1s will see a big dropoff in interest.

8) Stablecoins will find more use cases outside of crypto capital markets, which will drive more mainstream adoption — primarily among businesses — and innovation within Web3. Governments and private blockchain research and development will continue, with some announcing centralized public infrastructure like central bank digital currencies or marketplace infrastructure.

9) Culture wars around crypto will heat up toward the end of 2023, leading into the United States election cycle. Booms and busts will continue, with accidental hacks (like Wormhole), over-aggressive risk exposure (like Terra) and outright fraud (like SafeMoon). More politicians will take strong stances on crypto. However, the U.S. government will continue to be indecisive on regulation, to the detriment of the domestic industry. Any regulation that does emerge will be patchwork and could still allow risky projects to slip through the cracks.

10) As builders develop through the bear market, there will be a point in 2023 when new growth areas start emerging beyond existing prevailing narratives like NFT profile-picture projects, play-to-earn projects, alternative L1s, etc. The new narratives will propel the next cycle, and hopefully, these fresh frameworks will drive real consumer utility and adoption, bringing in several hundred million new crypto users/wallets.

The uncertainties of the future also represent opportunities, and those who are able to adapt quickly stand to benefit if significant changes do occur.

Mahesh Vellanki is the managing partner of SuperLayer and a co-founder of Rally. He served previously as principal at Redpoint Ventures after working for Citi as an investment banker.

Standard Chartered forecasts ‘surprise’ Bitcoin downside after FTX collapse

Multinational bank Standard Chartered considers potential downside for Bitcoin in 2023 as the cryptocurrency ecosystem weathers the collapse of FTX.

The value of Bitcoin (BTC) is being touted to drop as low as $5,000 in 2023 according to Standard’s Chartered global research head and chief strategist.

As initially reported by Bloomberg, a note to investors published on Dec. 4 from the multinational bank’s chief strategist Eric Robertsen weighed up a potential drop in Bitcoin’s value correlated with a surge in physical gold.

Robertsen outlined prospective scenarios for 2023 that could see interest rate reversals from hikes in 2022, further cryptocurrency sector bankruptcies and negative sentiment toward the market.

This could include further downside for Bitcoin next year, with a 70% decline from its current market value while gold could see an upside of up to 30% to the $2,250 mark per ounce.

The closing months of 2022 have been tumultuous for the wider cryptocurrency ecosystem. The collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange and hedge fund Alameda Research sent shockwaves through the industry in what has already been a tough year.

FTX’s bankruptcy proceedings have already led to collateral damage, with cryptocurrency lender BlockFi following in its footsteps due in part to “significant exposure” to FTX and Alameda and obligations that the defunct companies had with the former.

Meanwhile, cryptocurrency proponents have provided contrasting outlooks for the space in 2023. Renowned Venture capitalist and blockchain investor Tim Draper touted Bitcoin hitting $250,000 next year, highlighting his belief that the FTX fiasco would lead to greater decentralization, adoption of BTC and increased self-custody by users.

As Cointelegraph previously reported in late November, macro market analyst Henrik Zeberg also outlined a potential surge in the value of Bitcoin alongside other risk assets over the $100,000 barrier.

Hedge fund manager Mark Yusko also touted the potential start of Bitcoin’s next major bull run in the second quarter of 2023 as the ecosystem begins to accumulate BTC in anticipation of the next reward halving event.