Binance Research on Key Themes for Crypto in 2023

Analysts at Binance Research are keeping a close eye on several factors that could have a substantial impact on the cryptocurrency market in 2023.

According to Binance Research’s recently issued research (“Full-Year Review 2022 & Themes for 2023”), macroeconomics will be the driver of risk asset returns in 2023. Central bank policy, global GDP numbers, and recession threats will determine whether macro factors serve as a tailwind or headwind for crypto. According to Binance Research, as the crypto market expands and more institutional players enter the space, there may be a greater tie between traditional and crypto markets.

Another of their forecasts is that real-world assets would be leveraged to generate growth for DeFi and NFT activities. Two potential connection points with physical assets are asset tokenization and the acceptance of real-world assets as collateral.

Concerning Ethereum’s forthcoming Shangahi upgrade, they predict increased staking demand as the deadline for withdrawing staked ETH approaches. This may be advantageous for liquid staking approaches, but it is also likely to create market share volatility. A market share shift from Ethereum 2.0 to alternative liquid staking protocols that offer greater rewards or user experience is one example of this.

Binance Research believes that the usefulness of NFTs will be critical to their future mainstream acceptance. More innovation in areas such as blockchain game integrations, cooperation with Web2 firms, and other real-world use cases are expected to fuel the next adoption phase and move beyond simple picture NFTs.

Finally, Binance Research anticipates increasing regulatory certainty for cryptocurrencies. Regulators’ distrust is understandable, and it will be tough for crypto to regain public trust. In the long run, however, the blockchain industry would benefit from improved regulatory clarity. A government that establishes a clear legislative framework for Initial Coin Offerings (ICOs), for example, would provide a more secure environment for investors.

The survey stated that there was a lot of volatility in the industry in 2022, with many advancements and adjustments. Ethereum implemented a new validation mechanism known as Proof-of-Stake, and new L1 blockchains such as Aptos entered the market. Layer-2 scaling solutions grew significantly, but the total DeFi industry declined in value. The NFT market started well but faded later in the year. The blockchain gaming sector grew, but there were signs of a slowdown and a decline in interest in the virtual world concept. Multiple events throughout the year fueled the policy debate, and there was an increase in venture capital investment and fundraising efforts.