5 trends for cryptocurrencies and NFTs in 2023 = PwC report

5 trends in the cryptocurrency market

In December, Price Waterhouse Coopers (PwC), one of the world’s four largest accounting and consulting firms, released a report on the crypto asset (virtual currency) and NFT (non-fungible token) markets.

In particular, it forecasts and explains five trends:

reliability is key
stricter regulation
Opportunity for traditional financial institutions
NFT and Web3 spread to various places
A new crypto advocate emerges

What is Web3

The current centralized web is defined as Web2, and refers to an attempt to realize a non-centralized network using blockchain. A typical feature is the use case of decentralized networks such as blockchain, such as access to dApps using virtual currency wallets.

Cryptocurrency Glossary

“Reliability” is the key

First, regarding “credibility,” the report touches on the bankruptcy of major cryptocurrency-related companies such as FTX, stating that “unless credibility is regained, cryptocurrencies will not be able to fully demonstrate their potential.”

For this reason, he argues that companies that build credibility will succeed in the market. Specific methods include providing secure custody and third-party audits. Crypto companies say they can take guidance from traditional financial industry practices.

After the FTX bankruptcy, an increasing number of exchanges are disclosing their reserve assets in order to restore credibility. Further progress could be made by third-party audits on a broader spectrum, including “solvency, assets and liabilities, and controls,” the report said.

association: Asset disclosure of virtual currency exchanges, start of reports such as coinbase

Tighter regulations and opportunities for traditional financial institutions

Next, regarding “tightening of regulations,” the report predicts that the definition of which virtual currencies are commodities and which are securities will progress first. He also said that progress is expected in the regulation of stablecoins.

Others may see moves to limit the risky lending practices that led to the bankruptcies of major crypto companies in 2022, such as taking loans on the basis of collateral received. Says.

In the “Traditional Financial Institutions Movement,” he predicted that in addition to startups, “a small number of advanced traditional financial institutions” would also likely become “real winners” in the cryptocurrency space.

Such companies can leverage their “risk management capabilities, customer base and strong brands,” he said. Conversely, crypto-native firms can learn from these traditional firms in aspects such as managing counterparty and concentration risk, he continued.

Metaverse and NFTs

Next, it is expected that “Metaverse and NFT” will spread more and more in various places. First, although NFTs have been focused on speculative aspects so far, they have business functions and are useful in “increasing revenue, deepening customer ties, and improving various processes.”

Furthermore, he said that the spread of NFT will lead to the spread of Web3. The benefits of Web3 are explained as follows.

He argued that if such Web3 evolves, NFTs will be used everywhere in society, and it is expected that they will become so widespread that people will not even be aware of them.

Recovery led by social media companies

Finally, it argues that the emerging champions of the crypto industry and leading its eventual recovery are companies such as “merchants, social media and telecommunications companies.”

For example, some social media companies have the potential to become payment platforms for cryptocurrencies, and such companies could help boost the growth of the younger generation of consumers when it comes to cryptocurrencies. explained. It is also possible to try to provide users with digital identities in the form of tokens.

Currently, major social media companies such as Twitter, Discord, and Reddit are moving toward the introduction of virtual currency.