How will the cryptocurrency market fare in 2023? What the Experts Say
Most cryptocurrency fans were filled with confidence and excitement for the year ahead after seeing the numerous victories and advances in 2021. However, 2022 was undoubtedly a turbulent and difficult year for the cryptocurrency business, as it was marked by the onset of the “crypto winter,” the failure of algorithmic “stablecoins,” and a domino effect that led to a string of explosions and bankruptcies in the sector.
A new era of trade agreements, economic value creation, hardware manufacturing agreements, and bilateral ties will begin with the widespread adoption of Central Bank Digital Currency (CBDCs). “Additionally, it teaches investors to be patient when making investments. We anticipate a growth in the market by 2023’s end as new rules are introduced to make the cryptocurrency industry more secure. But when monetary stimulus slows and interest rates rise, the pool of potential investors who may profit from high strikes is going to become smaller “says Cashaa’s founder and CEO, Kumar Gaurav.
Rising Adoption: As more people learn about cryptocurrencies and the technology that powers them, it is expected that the number of people using these assets will increase. It might result in a greater level of acceptance by organizations and people, which might raise the demand for cryptocurrencies.
Enhanced Regulatory Precision: As the cryptocurrency industry develops and grows, regulatory organizations around the world will probably offer more information and direction on how these assets should be handled. This might promote increased adoption and help boost market confidence.
Major infrastructure projects: It is expected that the infrastructure supporting cryptocurrencies, like exchanges, wallets, and payment processors, will advance and become more user-friendly. This might simplify the process for people who want to purchase, trade, and use cryptocurrencies on a daily basis.
A 30% tax on virtual digital assets was enacted by the government in the 2022 budget, according to Eye on Taxation (VDAs). According to Rajagopal Menon, Vice President of WazirX, a cryptocurrency exchange, “the ecosystem is calling for reduced tax rates – 0.01 percent TDS on sale transactions instead of the existing 1 percent, parity with securities market long-/short-term gains instead of 30% tax on gains.” He continued, “This advocacy aims to support domestic cryptocurrency initiatives and boost acceptance to develop a self-sufficient cryptocurrency economy in the nation.
Institutional Crypto Investment: It is anticipated that the momentum of institutional investment in crypto assets will last for some time. The popularity of crypto assets as a store of value and the projected growth in market liquidity will both benefit investors. But as Menon notes, “the average funding value is anticipated to follow a similar pattern of 2022, with investors only supporting the most attractive projects with market viability after thorough analysis.”
Web3 development in 2023: Global cryptocurrency exchange Binance’s CEO of APAC, Leon Foong, predicted that the Web3 infrastructure will keep expanding and attract investors’ attention. “Security is important to build a robust Web3 infrastructure, and Binance plans to continue with initiatives like the Global Law Enforcement Training Program, disclosing Binance’s hot and cold wallet addresses through Proof of Reserves, and launching the Industry Recovery Initiative (IRI) to safeguard users and rebuild the sector,” he said.