In this unprecedented whiplash economy, the rest of 2023 should be full of interesting events. Crypto is definitely affected by macroeconomic developments and central bank edicts, but that doesn’t mean that this year will be a year of greater separation from the larger economy’s central planners. Uncorrelation from the macro economy will necessitate greater retail adoption, which will necessitate more intensive education from those of us in the crypto ecosystem. If crypto winter of 2022 taught us anything, it is that we must return to emphasizing fundamental principles for those who want to participate in blockchain-based economies. I noticed that the crypto space has shifted away from educating retail investors and advising professional investors to focus on the fundamental reasons why crypto exists in the first place. Since we’ve lost our way, refocusing on trustless systems, self-custody/security, thoroughly researching project missions and founders, and generally not engaging in foolish activities, goes a long way toward creating the type of environment required for long-term growth and prosperity. Here are Alpha Stake’s predictions for blockchain development in 2023.

Economic Outlook

GDP Growth:

Crypto analytics since 2020 shows the market cap of crypto is closely tied to the macroeconomic environment, particularly in the United States. The US economy is in an unusual state. The Fed has been able to control the economy for several decades using various tools such as interest rate adjustments, open market operations, issuing bank reserve requirements, overnight repos, the discount window with discount rates, term deposit facilities, and central bank liquidity swaps. Since 2020, all of these operations have been severely disrupted. With an inverted yield curve, the bond market is now signaling lower GDP growth in the future by valuing short-term bonds over the 10-year horizon. This occurred despite the Fed’s erratic policies, which ranged from the lowest interest rates since its inception to the steepest curve rate hike in history, rising from 0.25% to 4.5% in less than a year.

Rate hikes 2022-present

Meeting date

Rate change

Target range

Source: Fed’s board of governors

March 15-16, 2022

+25 basis points

0.25-0.5 percent

May 3-4, 2022

+50 basis points

0.75-1 percent

June 14-15, 2022

+75 basis points

1.50-1.75 percent

July 26-27, 2022

+75 basis points

2.25-2.5 percent

Sept. 20-21, 2022

+75 basis points

3-3.25 percent

Nov. 1-2, 2022

+75 basis points

3.75-4 percent

Dec. 13-14, 2022

+50 basis points

4.25-4.5 percent

Jan. 31-Feb. 1, 2023

+25 basis points

4.5-4.75 percent

Although the rate hike curve is steep, the effects will lag. We have yet to see what this will inflict on the markets or the general economy. Individuals’ savings are low, but their money market accounts and T-bill investments are higher since average savings interest rates at a bank are well below 0.5%. Real Estate has yet to take the brunt of these rapid changes because most folks took advantage of the low-rate environment and are locked in without being affected by the higher rates. Corporates that survived or thrived throughout Covid are sitting on healthy cash balance sheets and many are debating about the need for real estate purchases or leases since hybrid or strictly remote work was proven to work for many companies and brought about more efficiency or just bottom-line savings.

However, business loan terms are usually refinanced more frequently than retail. Thus, the higher rates will begin to eat into industries causing more capital to go to service debt vs R&D, employment, or acquisitions. This will lead to stagnation and overall slow-down.

While the Fed is attempting to fight inflation, which means less overall spending on goods and services to bring down prices, and they also want less employment. The higher unemployment metric is a strange data point in this environment of the lowest W2-worker participation and the highest number of baby-boomer retirees leaving the job market. Demographics alone should cause the central planners to adjust their expectations of not only the financialization of the middle class who are seeking alternative means to earn money versus the standard non-farm payroll job, but replacement workers could never refill the high number of boomers leaving the workforce. So, open job demands will remain high and current workers will continue to demand higher wages due to less competition.

With more technological aid, most industries will continue to produce at current levels or even higher. The most onerous restraints for industries in all developed Western nations are regulatory burdens and the high costs of compliance. If the goal is higher and ever-expanding GDP to cover higher interest rates on magnificently large debts, smarter policies must be enacted to streamline approvals, allow more free competition in nascent spaces, encourage entrepreneurial innovations, and take on more risks with government-sponsored entities and grants.

However, at least for the cryptocurrency space, it seems our government agencies are doing the exact opposite. We witnessed a definitive lack of regulatory scrutiny for several bad actors within the crypto space and a lack of cooperation with honest agents who sought guidance and clarity for the important work they are attempting. As of the first month of 2023, we are slightly up from 2022 all-time lows but remain far from 2021 highs. Many believe the crypto ecosystem will remain stagnant until the risk-off Quantitative Tightening (QT) period is over. QT is their attempt to pull liquidity out of the economy as many central banks around the world are attempting to do. However, much pressure is on the Fed to not break things too drastically domestically. Other nations that denominate much of their debt in U.S. dollars are also struggling to fulfill their obligations with a strong dollar that becoming harder to acquire. Many nations are facing even higher energy inflation, food production inflation, and capital flights from unstable nations such as Russia and China are finding Western real estate safe havens which cause more strain on the local Western citizenry. So, non-U.S. nations need a weaker dollar to grow their economies because everyone over-printed currencies and kept Quantitative Easing in place for too long.

As quoted by the IMF’s Gita Gopinath and Pierre-Olivier in October 2022 How Countries Should Respond to the Strong Dollar, “As of now, economic fundamentals are a major factor in the appreciation of the dollar: rapidly rising US interest rates and a more favorable terms-of-trade—a measure of prices for a country’s exports relative to its imports—for the US caused by the energy crisis. Fighting a historic increase in inflation, the Federal Reserve has embarked on a rapid tightening path for policy interest rates. The European Central Bank, while also facing broad-based inflation, has signaled a shallower path for their policy rates, out of concern that the energy crisis will cause an economic downturn. Meanwhile, low inflation in Japan and China has allowed their central banks to buck the global tightening trend”.


The only saving grace for most emerging economies is to focus on their richest commodities and export them for a premium to compromised developed Western nations who seek much-needed raw inputs to maintain their industries and farmland production due to disassociation with China, a cut-off of Russia, and a compromised Ukraine.

Human Resources

Human resources are another asset that emerging markets may not want to lose. With low birth rates in Europe and other developed countries, the demand for replacement workers is increasing. Immigration policies will relax, and brain drain will be a major threat. Remote work may be the solution for professionals who can fulfill their responsibilities in front of a computer regardless of where they are. Developing countries should do more to allow their most talented university graduates to negotiate remote work and help build their home country by capturing a larger tax base.

This is especially important for the decentralized digital assets ecosystem. With greater openness to innovations and alternative financial systems, smaller nations can free themselves from the cycle of dependence on the IMF or WEF, or any other agency to rescue them when there’s economic turmoil caused by decisions made in other nations whose currencies they are entangled with. Many blockchain projects desire talent from around the world. The talent can remain local and operate servers (nodes, validators) in their home countries. This benefits the workers who are paid in uncorrelated digital assets, blockchain technology advances in the local area, and many talented individuals will seek to train others to expand their work capacity (jobs creator). The benefits are exponential, and many are advancing the conversation about these opportunities.

As quoted by Mayur Kamat, Head of Product at Binance, “What’s the next thing you want to do? Is it something that may potentially change the world and how people view financial investments, inclusion, and freedom? If yes, there’s never a better time than now. There’s so much room for growth and innovation, and some of the brightest minds are working here”. You can read more about Mr. Kamat’s journey at,

The Builder: How Binance Product Lead Mayur Kamat is Helping Build The Future of Web3


Mayur Kamat’s resume includes some of the most prominent tech companies, from Google to Microsoft. Now, he brings his experience to take on a new challenge as the Head of Product at Binance.


Market Trends

Equity Markets

Equity markets began the year not really believing what Jerome Powell was declaring for interest rate hikes and Quantitative Tightening. Market conditions moved slightly towards the end of 2022 with a quote from CNBC, “Stocks slipped on Friday to end a brutal 2022 with a whimper, as Wall Street wrapped up its worst year since 2008 on a sour note. The Dow Jones Industrial Average slid 73.55 points, or 0.22%, to close at 33,147.25. The S&P 500 shed 0.25% to end at 3,839.50. The Nasdaq Composite ticked down 0.11% to 10,466.88”.

After the first month of 2023, the Forbes Advisor stated, “After logging its worst annual performance in 14 years in 2022, the S&P 500 kicked off 2023 with a very strong January. The benchmarked index gained a smidgen more than 6% for the month as the first wave of fourth-quarter earnings reports came in better than many had feared. In the background, inflation data suggest that Federal Reserve policy measures are starting to cool off red-hot price gains, while gross domestic product and labor market readings show that the U.S. economy remains on solid footing—for now”.

Since the beginning of 2023, optimism is high for growth potential, and many believe the Fed and other Central Bankers will ease by mid-year. However, others believe the rates will be held higher for longer, and max pain will occur throughout the first half of 2023, with relief from the bear market only being seen towards the end of 2023. This is if the stock and bond market associate with the physical economy more closely. The Fed’s fight against rising interest rates will take time to appear in the real economy. However, the stock market is a forecaster of future overall GDP and there could be premature front-running of what is to develop. The crypto market front-runs the equities market by about 6 months, so, the upswing for crypto in the first 6 weeks of 2023 is signaling a trend pivot of equities by late summer.

Physical Goods

Market outlook for the used cars expects a crash along with real estate. The larger question, however, is how much liquidity will be left in the market to allow these sectors to rebound quickly or slowly.

If trust in physical assets is low for recovery, larger investors may seek yield by investing in virtual economies such as the metaverse or web3. The first cycle of NFT assets is over, and builders are infusing more use cases into virtual assets. Many lessons were learned in 2020 and 2021 that will fuel innovation towards ongoing community building and thus increase value creation with each project.

With the decline of the ESG narrative and the increased awareness of the need for oil, natural gas, and nuclear energy sources, more investment may go toward infrastructure efforts for American and European energy sustenance. Since a renewed focus on re-shoring much of Western manufacturing, more cheap energy and regulatory policy changes are needed to meet our most basic needs. Cryptocurrency can assist in these efforts by enabling more transactional transparency between those who contribute to the energy grid and those who want to know the exact sources of their energy consumption. Projects such as Energy Web (EWT) are almost ready for prime-time. Grid+ (GRID) is a project that not only hopes to acquire uses to transfer their tokens for energy payments but also uses their hardware as a secure wallet for digital assets.

Bond Market

Safe havens for 2023 look to be defense stocks with geo-political activities around the world. Many hedge funds may outperform in comparison to the previous 10 years of monetary easing and an ever-increasing stock market. Diversifying back into bonds and fixed income with higher interest rate yields is a safe placement for excess capital until a definitive pivot is noticed. Corporate bonds are also a solid play until equities recover.

Venture Capital

Deal flow will slow for insider Limited Partners of private Venture Capital funds, but deal quality should improve, which could pay off exponentially in the coming years. Most managing partners will become much more picky about the startups in which they will invest. With so much capital on the sidelines, however, placements must be made. As a result, founders with a solid product/market fit and a competent team will receive headline-grabbing investments in 2023.

Crypto Economy

Improved infrastructure within the cryptocurrency economy is enabling more strategies for investors. For example, there are defi platforms that enable shorting (ByBit), forms of forex trading (Vela), and purchasing options (Deribit). Investment diversification allows more professional traders, whether day traders or swing traders, to enter the market, and curious investors will interact with UX interfaces they are familiar with. Retail will lead the next rally now that decentralized crypto exchanges, built on blockchains such as Solana, are nimble and fast enough to compete with centralized exchanges. Institutional investors will remain on the sidelines for a longer period of time until regulatory clarity is improved and the consequences of 2022 are fully realized.

Geopolitical Risk

The next black swan event that no one in the investment world will see coming could be a disastrous turn of events of escalation with the Russian conflict. If Russia continues to advance, they will eventually engage a NATO nation. If Russia begins to take heavy losses due to superior weapons being supplied to Ukraine by NATO nations, desperation may cause the Russians to launch nuclear weapons. Either outcome is becoming more likely as the war continues, however, these are not the only two outcomes possible. Investors must keep a close eye on developments and prepare for worst-case scenarios that will affect market moves dramatically.

Cryptocurrency Developments and Opportunities

Emerging Technologies

The biggest advancement that captured the imagination of the general public in late 2022 was Artificial Intelligence (AI). With the advent of Chat-GPT, many now realize the power of one of Cathy Woods’ Ark Invest’s great innovation pillars along with energy storage, robotics, DNA sequencing, and blockchain tech. The development of these sectors will disrupt classical models of investing tremendously. Even bigger will be the convergence of these innovations to create synergy toward a new reality we can barely fathom.

As of now, it’s not certain how AI will impact digital assets other than ensuring blockchain-based authenticity in a rapidly expanding deep-fake era. Developers and users at every level can bring products to market much faster with the addition of AI supplementation to code writing, user experience interface, and website copy.

Creating more content, products, and deeper knowledge bases in a cheap energy environment will require the protection of the blockchain for individuals, companies, and organizations to maintain their sovereignty, privacy, and security, which is bullish. The exponential growth of technology platforms will require an increase in server power. Current capacity can be expanded quickly in centralized entities such as Google Cloud, Amazon Web Services, or IBM/Microsoft’s Azure, however decentralized expansion of edge data centers is also needed to maintain the values of the blockchain listed above. Regulatory barriers may stymie the development of blockchain-based businesses, but not the advancements in technology.

Regulatory Development

Although Gary Gensler of the Securities and Exchange Commission (SEC) met with Sam Bankman-Fried on many occasions, my speculation is to develop schemes for FTX’s regulatory capture of the custody crypto market, he has yet to provide a clear path for anyone else in crypto.

The year of deleveraging and lack of monetary controls for companies that held other people’s cryptocurrencies created an environment of thieves and scallywags who lost billions of dollars. With such irresponsible behavior, law enforcement, the courts, lawmakers, and regulatory bodies are focused on crypto-based companies like never before. Since the lack of rule-making and guidance has lasted so long within the U.S., with the few actions taken by regulators being ad-hoc and onerous, the only thought about what comes next is a heavy and damaging regulation-by-enforcement hand.

The only way to prepare for what’s to come is for crypto consumers and citizens to rally support for Representatives and Senators who understand the technology and want to act in good faith toward better behavior and clarity about what’s required to operate in the United States. Even if it means creating sandboxes or completely rewriting security laws to accommodate fast-moving modern technologies. The industry may be stifled if innovators expend too much energy, time, and resources determining what is legal or moving out of the country to set up shop offshore.

Digital Assets Advances

After the many failures of 2022, many investors did not cash out of the crypto space, but instead, crypto investment capital poured heavily into Defi projects. According to The Defiant’s Owen Fernau in November 2022, “DeFi protocols are experiencing double-digit increases in the number of users over the past week, according to data from Nansen, the blockchain analytics platform. 

MakerDAO, DeFi’s largest protocol with $6.5B of total value locked (TVL), has increased addresses by a third in the last week. And other top 10 protocols have also attracted huge jumps in users, with Aave, a lending protocol, notching a 70% increase, and Curve, a DEX, a 63% spike.

Lender Compound and yield booster Convex also drew 30% rises in users, according to the data Nansen shared with The Defiant”.

Although the total value within Defi protocols dropped from $165B in April to $42B by December, the overall number of users went up. Despite a drop in token value and a mass exodus of institutional investors from the space, retail investors are the crypto enthusiasts driving the market again and are seeking solutions within the Defi ecosystem.

Ethereum upgrades are continuing with the Shanghai revision that unlocks staking. A highly anticipated event that should establish a true benchmark measure within crypto when individuals are free to stake and un-stake at will. The interest rate earned at any given time will be equivalent to the fixed-income bond index in traditional markets.

Staking and liquid staking continue to innovate. Projects such as Bancor are developing schemes to reduce or eliminate impermanent loss, more efficiency via multi-chain access, and like Uniswap’s latest innovation, liquidity providers can choose a range to provide their capital for swaps. From Uniswap’s medium post: “In V3, LPs can choose a custom price range when providing liquidity. This allows for concentrating capital within ranges where most of the trading activity occurs”.

Stable Coin Battles

Stable coins will face increased scrutiny in a post-FTX “show me proof of your reserves” environment. The battle for stable-coin acceptance by U.S. regulators will intensify. Most likely only one or two crypto projects will be “allowed” to issue stable coins, fully backed by U.S. Treasuries, and no allowance for retail customers to earn interest on stable coins moving forward. The payoff for the winner is enormous as interest on the T-bills alone will net Billions of profits every year.

Privacy Priority

Zk-snarks (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) development increased in cryptocurrencies to invest by gaining attention for investors seeking privacy and autonomy to transact without spying eyes. Privacy coins have been around for years, ZCash, Dash, and Monero (which were targeted by regulators in 2022). However, crypto investors demand for this same level of privacy to be extended to other chains also. Litecoin stepped up and created a means to turn on or keep off private transactions. Investment firm A 16z had the foresight in 2021 and invested in Matter Labs to help bring zkSync technology using zk-SNARKS to Ethereum. So, 2023 should bring more main net realization of privacy solutions for other blockchains, new and existing.

Crypto Acquisitions

With the decline in overall market capitalization for publicly traded or well-known private crypto-based companies, the possibility of buyouts by established financial institutions has increased. This will be their fast track to capturing the technology and ensuring that they capitalize on the next upswing or outright displacement of old systems..


The NFT bubble opened the door to a new block-chain based digital value creation. The next iteration will connect entertaining games with unique digital assets that can be used outside the game. Standards must be developed to establish baseline rules for intellectual property rights, display rights, and cross-platform compatibility, as well as to ensure the NFT maintains its scale, functionality, and overall appearance. With more non-crypto native influencers, from Gary V to Tim Ferris, entering the space and expanding the utility of NFTs, the value and growth of communities will only increase. Gamification must be incorporated into non-fungible tokens, whether they originate within a game or are minted by a celebrity; thus, allowing creativity to expand for token holders.

Real World Assets Tokenized

We will see an increase in physical items tokenized this year in the cryptocurrency industry. Tokenization is occurring but much is done on small-scale items that can be easily shipped to individuals to take possession. However, government entities must become involved for larger items such as tokenizing real estate. Hopefully, more foresight from token issuers will lead this effort with legislation guidance written and handed to lawmakers before they ask for ideas. Once a structure is in place to read, audit, and verify the smart contract code by regulatory bodies, a multi-trillion-dollar worldwide market will be unleashed. However, before large-scale items are tokenized, we will continue to see collectibles, art, and slightly larger items like automobiles transfer ownership via the blockchain.


The adoption of AI, along with other innovations, is expected to create synergies that will disrupt classical models of investing. The blockchain industry will require protection to maintain its privacy, security, and sovereignty values. Crypto regulation development is crucial to provide clarity and better behavior for crypto-based companies. However, before centralized finance can take hold again, the adoption of Defi protocols is increasing. Leading the way are Ethereum upgrades, and along with Shanghai, developers are also hoping for Proto-Danksharding by fall. Other L1 tokens are closely watching Ethereum’s developments and seeking ways to create unique value propositions while developing interoperability solutions.

The NFT (Non-Fungible Token) market experienced explosive growth in 2021, but it faced a significant decline in 2022, leading some to question whether it was just a passing fad. However, in late 2022, NFTs made a slight comeback with new use cases and developments. The gaming industry is driving the demand for NFTs, as players use NFTs to purchase and trade in-game items, skins, and virtual real estate.

2023 is expected to be a year of continued growth and innovation for the crypto industry. AI, blockchain, and other disruptive technologies are expected to converge, creating new opportunities for developers and entrepreneurs. Regulatory developments, stablecoin battles, larger DeFi participation, and the growing demand for privacy solutions are expected to shape the industry’s landscape in the coming year.