After dealing a significant financial blow in 2022, the crypto industry hopes for a strong rebound this year as new regulations come into force, making the cryptocurrency space more secure. In addition, India, which took over the G20 presidency, has announced collaborations and synergies among nations to develop international crypto laws and frameworks.
Expected Crypto Market Trends In 2023
The use of Central Bank Digital Currency (CBDCs) globally will usher in a new era of trade agreements, economic value creation, hardware manufacturing deals, and bilateral relations. "It is also teaching investors to have patience regarding their investments. For 2023 end, we expect a rise in the market as new regulations are coming to make crypto a more secure space. However, rising interest rates and easing monetary stimulus will likely produce a tougher funding environment that will narrow the field of potential investors that can win high strikes," says Kumar Gaurav, Founder & CEO of Cashaa.
Increased Adoption: As more people become aware of cryptocurrencies and the technology that underlies them, the number of people using these assets will likely continue to grow. It could lead to increased adoption by businesses and individuals, which could drive the demand for cryptocurrencies.
Greater Regulatory Clarity: As the cryptocurrency sector continues to grow and mature, regulatory bodies worldwide will likely provide greater clarity and guidance on how these assets should be treated. This could help to build confidence in the market and encourage greater adoption.
Improved Infrastructure: The infrastructure surrounding cryptocurrencies, such as exchanges, wallets, and payment processors, will likely improve and become more user-friendly. This could make it easier for people to buy, sell, and use cryptocurrencies in their daily lives.
Eye On Taxation: In the 2022 budget, the government imposed a 30 per cent tax on virtual digital assets (VDAs). "The ecosystem is advocating for lower tax rates - 0.01 per cent TDS on sale transactions instead of the existing 1 per cent, parity with securities market long-term/short-term gains instead of 30 per cent tax on gains," says Rajagopal Menon, Vice President, WazirX, a crypto exchange.
"This advocacy is to promote homegrown crypto projects and boost adoption to create a self-reliant crypto industry in the country," he added.
Institutional Crypto Investment: The momentum of institutional investment in crypto assets is expected to continue for a while. The market will likely have increased liquidity and the popularity of crypto assets as a store of value. "However, the average funding value is expected to follow a similar trend of 2022, with only the most promising projects with market viability getting supported by investors after careful consideration," says Menon.
Progress Of Web3 In 2023: Leon Foong, head of APAC, Binance, a global crypto exchange, said the Web3 infrastructure will continue to grow and draw investors' attention. "To build a robust Web3 infrastructure, security is important, and Binance plans to continue with initiatives such as Global Law Enforcement Training Program, disclosing Binance's hot and cold wallet addresses through Proof of Reserves, and establishing the Industry Recovery Initiative (IRI) to protect consumers and rebuild the industry," he said.