Despite a hectic year plagued by cryptocurrency crashes and price declines, Steven Goulden, a senior research analyst at cryptocurrency trading firm Cumberland, has pointed to several “green shoots” coming to the crypto space in 2023..
In a 14-page “Year in Review” report published on December 24, Goulden said that four “emerging narratives” in 2023 will lead to “significant progress” for crypto in the next six to 24 months..
Between them, non-fungible tokens (NFTs) will become a “go-to method” for tokenizing a brand’s intellectual property (IP), Web3 apps and games will become “truly popular,” while bitcoin (BTC) and Ether (ETH) ) could become more commonly used as a nation’s reserve assets.
In 2023, we anticipate that we’ll see meaningful green shoots break the surface in several key areas, which will pave the way for significant progress in the next 6-24 months. Hear from a senior research analyst on emerging narratives for 2023: https://t.co/8E0cZOp6Ta pic.twitter.com/rO1KKvxIdA
—Cumberland (@CumberlandSays) December 23, 2022
In 2023, we anticipate that we will see significant green shoots surface in several key areas, paving the way for significant progress in the next 6-24 months. Hear a senior research analyst discuss the outlook for 2023: https://t.co/8E0cZOp6Ta pic.twitter.com/rO1KKvxIdA
Goulden argued that, While NFTs have “largely been confined to the art space” up until now, he believes the next step for NFTs will be bringing NFTs and brand IP together..
The analyst points out that many non-Web3 companies are already making “significant progress” in monetizing IP and improving customer engagement with NFTs.
For example, Starbucks has partnered with Polygon to generate NFTs for their customers, and Nike has launched the Swoosh, which allows users to design custom NFTs for their sneakers..
“Listening to these companies talking about their Web3 initiatives, it’s clear that they see digital engagement with customers and fans as a new aspect of the retail experience,” says Goulden..
He also noted that “the sale of NFTs to retail users has the potential to generate material and high-margin revenue.” Nike is an example of that; generated USD 200 million from digital sneakers alone. The analyst expects Polygon (MATIC), LooksRare (LOOK) and 0xmon (XMON) to lead this front.
The Cumberland analyst also said that NFTs will become an “intellectual property tokenization method” as there are around $80 trillion of intangible assets that exist on company balance sheets today.
Utility applications in the real world will gain ground
Goulden also believes that the adoption of Web3 platforms that provide “real world utility” will start to gain traction in 2023.acknowledging that up to now it has been “extremely difficult” to upset Web2’s monopolies:
“The reality is that projects like this take time to get up and running, so we anticipate that material traction will likely be 12+ months from now, and serious user adoption will likely occur. within 2 to 5 years.”
Among the “really useful for the real world” platforms that Goulden singled out were the Braintrust computer contracting platform, the Helium Internet of Things protocol, the GPU Render rendering service, the global mapping project Hivemapper, and the transportation app Shared Teleport.
Web3 games will attract “serious” gamers
The analyst was also optimistic about the Web3 game market, noting that there are about 3 billion gamers in the world, 200 million of whom are “serious”, representing between $200 and $300 billion of total potential market.
“[…] however, these users typically do not own in-game items and have little control or governance over these game ecosystems,” Goulden said..
Goulden claims that the play-to-earn aspects of blockchain-based games will lead to significant profitability for developers, but added that, since it takes “about 2-3 years to build a triple-A game (highest quality blockbuster)”, we probably won’t see a “Web3 game that becomes a star” until 2023 or 2024.
BTC and ETH as reserve assets
Finally, the research analyst suggested that close attention should be paid to the potential role of BTC and ETH as a reserve asset, especially for export-focused nations.
Goulden said that many highly exporting nations around the world may choose to stock their reserves with alternative assets such as cryptocurrencies instead of US Treasury bills as a means of depressing their own currencies against the US dollar:
“Even a small central bank allocation to BTC or ETH would be material and likely lead other exporting states to follow suit.”
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