According to Block Research, the overall macro environment will continue to put downward pressure on high-risk assets like cryptocurrencies in 2023. However, rather than experiencing a serious decline, a sideways move may be more likely in the next year. According to the team, many projects that fail to achieve product-market fit are expected to be abandoned due to lack of funding and demand.
M&A activities are expected to increase as companies in financial difficulties are sought to be acquired. Venture finance is also projected to slow down significantly in the first half of 2023.
“Cryptocurrency Prices Are Expected To Continue To Depend On The Steps Of Central Banks”
Cryptocurrency prices are expected to remain relevant to central banks’ monetary policies, according to Block Research. The gap between the market caps of Bitcoin and Ethereum is expected to continue to narrow, but the “flippening” (Ethereum overtakes Bitcoin in market cap) is not expected to occur in 2023.
The main tableau in 2023 is expected to shift towards Ethereum layer-2 scaling solutions and the total value (TVL) locked to these solutions is expected to increase (at least in terms of ETH value). Zk-rollups are expected to outperform optimistic rollups in relative growth.
Major layer-2 solutions like StarkNet, zkSync, and Arbitrum are expected to release their tokens. Modular blockchains like Celestia are expected to attract more attention and outperform the monolithic blockchains offered by the previous cycle.
The decline of centralized crypto companies over the past year is expected to lead to increased regulation for centralized entities, with Binance being the main focus in this regard. Coinbase is envisioned to take advantage of the uncertainty surrounding Binance.