Mauricio Di Bartolomeo, one of the founders of the decentralized finance (DeFi) protocol LEDN, shares his predictions for the coming 2023 based on what this year 2022 has been. Let’s see what it is about and how this could affect the crypto industry in the new year.
1) The market cap of the top 4 stablecoins will surpass that of Ethereum and become more than 50% of the market cap of Bitcoin.
Despite the crash of the Terra algorithmic stablecoin in the first half of 2022, Di Bartolomeo notes that we may see stablecoin dominance in the first quarter of next year.
According to data compiled by Glassnode, the market for ‘stable’ coins briefly outperformed the market capitalization of the first altcoin on the market, Ethereum for a few days in 2022.
The Led co-founder’s prediction goes even further: He expects the stablecoin market size to continue growing by 2023 to become more than 50% of Bitcoin’s market capitalization.
2) Stablecoins will be regulated by the US, which will create a divergence in the market between stablecoins that are compliant with US regulations and those that are not.
In this second projection, Mauricio agrees with many of the analysts of the incipient cryptocurrency market after the collapse of FTX/Alameda Research: there will be greater regulation in the sector.
“US regulators are likely to get in on the action, and the cleanest, and arguably most beneficial area for the US to regulate is US dollar-pegged stablecoins,” Mauricio highlights in his analysis.
This would allow a long-term benefit for the United States since it would increase the scope of its currency under its supervision and would create a natural buyer of US Treasury bonds.
3) There will be more mergers and acquisitions in the crypto industry.
As a result of regulations and their implicit costs, as well as the economic policies designed by central banks to cool inflation, the macroeconomic environment will force many companies to make “economies of scale by consolidating or merging efforts” in order to cope with the induced economic winter.
For Bartolomeo there will be such an economic winter (bear season for crypto) that trading volumes and general activity will drop, so it will be likely to see new mergers in the industry both at the level of centralized entities and in DeFi to reduce costs and support winter.
4) Regulation in the US will cause changes in product availability for US customers as companies are slow to adapt. However, the same regulations will pave the way for banks to start getting more involved with cryptocurrencies.
At this point, Mauricio points to a cost-benefit for the US market and in general for the momentum of the cryptocurrency industry. Due to the latest events with FTX, BlockFi and Celsius, it is likely that legislators will step up more in the first half of 2023 to promote the respective legislation with the premise of ‘consumer protection’.
Of course, the above will mean that many products and solutions that some companies planned to launch by 2023 will be delayed or simply restricted in the US until they are able to adapt to the new regulatory frameworks.
However, as Di Bartolomeo points out “should pave the way for more traditional financial institutions to enter the space, which should ultimately lead to more choice for consumers in the long run”.
5) Books will be published highlighting all the scams and losses that cryptocurrencies caused throughout 2022. Contradictably, these books will attract newcomers to the space, as some seek to learn more and others try to repeat the fortunes created in 2021.
Due to the importance that the collapse of FTX and the life of its CEO Sam Bankman-Fried have had inside and outside the industry, it is likely that new stories will begin to be told by famous writers like Michael Lewis, who already He has indicated that he is working on something in this regard.
FTX founder met with ‘The Big Short’ author Michael Lewis https://t.co/nyE8HsNO9V
— Just the News (@JustTheNews) December 28, 2022
Of course, this narrative will bring more interest from a new public to the world of cryptocurrencies that will want to learn from the events that occurred in 2022, while another group could be inspired by the fortunes that were amassed to try to ‘play and speculate’, such how Mauricio highlights in his analysis.
6) The race to trade stablecoins on bitcoin rails will intensify.
In this prediction, Mauricio once again highlights the optimism that invades him about stablecoins for the next 2023. On this occasion, he highlights the current race that exists between various protocols and various L1/L2 solutions to intensify the use of stablecoins.
As an example of the above, he mentioned how Lightning Labs leads the way with successful fundraising to bring stablecoins to the Bitcoin network. He also highlighted the use of USDT (Tether) in Iran through the Tron blockchain amid a difficult socio-political context in 2022.
7) Gold to break above $2,000/oz as central banks and sovereign wealth funds begin to allocate more of their reserves
On this occasion, Mauricio relies on the macroeconomic data of the US economy to assert that the precious metal will return to trading above two thousand dollars an ounce by 2023.
“Gold is inversely correlated with the real yield of the US dollar (interest rate minus inflation). As the Federal Reserve raised rates and inflation eased, real yields improved for most of the year and gold fell from over $2,000/oz to a low of $1,660 in September. However, as the Fed approaches its terminal interest rate (meaning it won’t collect any more) and inflation levels off, gold should benefit in 2023.”
He also added that central banks will further boost the price of gold as a reopening with China occurs, swapping foreign bonds from their reserves for the precious metal.
8) After the Shanghai update goes live that will allow users to stop staking their Ethereum, the Ethereum price will move north of 0.09 BTC.
With Shanghai scheduled for March 2023, Mauricio believes that the narrative around this update could become strong and present in the headlines once the current news context passes.
“This narrative should pick up early in the new year, and the thirst for staking returns should fuel a new wave of investors, causing ethereum prices in bitcoin terms to break above 0.09 BTC sometime in the new year. year”.
For Mauritius, the narrative around Shanghai will be similar to that of the Merge in September of this year, which pushed the price of ETH higher under the premise “buy the rumor, sell the news”.
The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.