What will happen with crypto in 2023?

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It has been an interesting year for the crypto space. Hacks, alleged frauds, huge losses, bankruptcies and other negative phenomena unfortunately circled and eroded confidence in the digital economy.

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Still, several experts believe that these events and a post-FTX landscape will trigger positive developments, such as much-needed regulations, that will bring clarity and help restore trust.

Just in terms of crypto hacks, 2022 was a banner year. According to an analysis by blockchain intelligence firm TRM Labs, $3.7 billion was stolen. The bulk of the hacks involved DeFi projects, resulting in 80% of the total stolen funds.

There were 10 mega hacks, which TRM defines as hacks involving $100 million or more. These accounted for 75% of the total amount stolen in 2022.

After this chaotic year, what can we expect in 2023?

No more flight en route

We will inevitably see more hacks and other exploits, said Ari Redbord, head of legal and government affairs at TRM Labs.

The nature of crypto allows North Korea and other cybercriminals to steal funds at alarming speed and scale, Redbord explained. In 2023, we will see renewed global cooperation on ransomware, but the most critical element will be a decision by crypto-related companies, especially in the DeFi ecosystem, to strengthen cyber defenses against bad actors.

Redbord added that the only way to stop the hacks is to stop the initial intrusion.

What about the regulations?

When it comes to regulations in the crypto space, while there hasn’t been much movement from Congress in 2022, we’ve seen the start of growing global consistency around frameworks for digital assets, a said Redbord.

While we’re unlikely ever to see a global regulatory regime, the nature of crypto, which enables cross-border transfer of value at internet speeds, means we need consistent standards, he said. We are starting to see this in places like the EU, Singapore, Dubai, and the UK when it comes to stablecoins, licensing regimes, and anti-money laundering standards.

The story continues

We’ll likely see more of that around the world in 2023, Redbord said, in addition to the movement on stablecoins in the United States.

FTX Spinoffs

Obviously, the FTX debacle represented one of the biggest setbacks of 2022. Although it affected the crypto space, it was not a crypto event, according to several experts.

Redbord said the interesting thing about FTX is that laws are already in place to stop and punish this type of behavior and we are seeing it happening in real time. The Department of Justice uses criminal fraud and conspiracy laws, regulators such as the Securities and Exchange Commission (SEC) pursue civil actions, and investors and consumers go to court.

FTX looked more like Enron or Lehman than a company that harnessed the power of cryptocurrency, Redbord said. the [alleged] the fraud committed by FTX executives did not happen on blockchains, it happened in the opaque corridors of power that existed long before cryptocurrencies.

self-guard

In a post-FTX/Celsius/Voyager crypto landscape, more investors are likely to turn to self-custody of their assets. Joseph Collement, general counsel at Bitcoin.com, says he hopes that happens because of the mess of 2022.

This is how this industry was originally envisioned by its creators, he said. And by coming back to this vision, this is how we will grow and prosper.

Cuban, Saylor wants more Bitcoin

When it comes to what 2023 holds for the space more broadly, Bitcoin will reign supreme for some, including Mark Cuban and MicroStrategy founder Michael Saylor.

On December 26, Cuban said on the Bill Mahers Club Random podcast that Bitcoin is a better store of value than gold and that he wanted to buy more of it: I want Bitcoin to go down a lot more so I can buy more of it, Cuban said, according to Decrypt.

As for MicroStrategy, it continued to increase its bitcoin holdings. As of December 27, MicroStrategy held approximately 132,500 bitcoins acquired for approximately $4.03 billion, an average price of $30,397 per bitcoin, Saylor tweeted.

Between Nov. 1 and Dec. 21, 2022, MicroStrategy purchased 2,395 bitcoins for about $42.8 million in cash, at an average price of about $17,871 per bitcoin, according to an SEC filing.

While he sold 704 Bitcoins on December 22 using the wash trading tactic, he bought 810 Bitcoins on December 24 for around $13.6 million.

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This article originally appeared on GOBankingRates.com: What will happen with crypto in 2023?

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