2023 Crypto Outlook: No Gurus, Only Cycles
TechFlow Selected TechFlow Selected
2023 Crypto Outlook: No Gurus, Only Cycles
Reclaiming the Crypto spirit in web3's downturn.
Navigating Web3 tides with focused insights
Produced by: TechFlow & Hotpot DAO
Interviewers: 0xmin/Sally
"No gurus, only cycles."
This is a phrase I came across this morning while reading emails. It couldn't be more fitting as both a summary of 2022 and an outlook for 2023.
Recently, major institutions have been making frequent predictions about 2023. What's interesting now is that we can look back from the end of 2022 at forecasts made for the year just ending.
For example, at the beginning of 2022, BitMEX made five predictions:
1. More women than ever will embrace cryptocurrency in 2022.
2. Solana will weaken Ethereum’s dominance.
3. Crypto gaming will experience explosive growth.
4. Demand for high-yield crypto savings products will surge.
5. Crypto companies will seek to acquire traditional financial firms.
Looking back now, those predictions were indeed somewhat optimistic—but that’s part of the charm of forecasting. Making predictions in the face of uncertainty is difficult. In fact, being wrong is often normal; being right is rare. The very act of taking a clear stance with a definitive forecast requires courage.
And precisely because of this uncertainty, we remain full of anticipation for the future.
With curiosity and hope, TechFlow and Hotpot DAO posed the question—“What are your predictions and expectations for 2023?”—to numerous industry practitioners to gain insight into their thinking.
He Yi, Co-Founder & CMO of Binance, Head of Binance Labs
1. I’ve always believed predicting the future is extremely difficult—the next big trend usually emerges in areas people aren’t really talking or speculating about.
Just like before ICOs, DeFi, NFTs, Metaverse, and GameFi took off—six months to a year prior—it was hard for anyone to accurately foresee which sector would truly explode. Yet they did happen. A successful sector, much like a successful industry, depends on its product ecosystem. Once truly innovative and user-attractive products emerge, they pull in more users, accumulate traffic, and ultimately form trends and momentum.
2. Every industry has its own cycle and evolutionary process—innovation accelerates industry development and adoption.
Each winter is warmer than the last; each cycle sees the industry grow larger. Blockchain technology initially evolved slowly with relatively narrow applications, but innovations like smart contracts expanded use cases, accelerating technological progress and diversifying application methods. Meanwhile, more traditional institutions and enterprises are entering the space, bringing not just capital but also talent. Overall, I remain optimistic—the industry will continue moving upward. In the near future, we’re bound to see some disruptive innovations that drive mass adoption and propel the industry into its next fast lane.
Blockchain/Web3 is still in early development. For many people, blockchain applications remain high-barrier and complex to use. Therefore, Binance Labs pays special attention to innovative projects in infrastructure, applications, security, and data services. Infrastructure refers to solutions addressing current pain points in the blockchain industry, while applications should improve everyday life and solve real-world problems. We aim to help mainstream users discover more adoption scenarios in the new year, supporting truly important, foundational companies and projects. The future holds great promise.
3. 2023 will be a year of “repairing” industry confidence—don’t dismiss the entire industry’s value due to temporary downturns.
Over the past year, we’ve witnessed a series of extreme events—constant reminders of a simple truth: “Be prepared for danger in times of peace, survival in times of existence, and order in times of stability.” We must maintain sufficient respect for this market, uphold principles and底线, keep our heads down, build solid products, serve users well—and only then can businesses endure and the industry evolve.
Qiao Wang, Founder of Alliance DAO
The coming year will be quiet. The media won’t cover us extensively, your friends won’t care what you’re doing, and even your employees might secretly look for jobs outside crypto. But by year-end, the market will be slightly better than today.
Feng Liu, Partner at BODL Ventures
Pouring chicken soup during winter—frankly, it’s all politically correct nonsense.
Indeed, we’ve experienced a wild狂欢over the past two years, leaving behind nothing but chaos. Right now, the chill is biting. At this moment, can we still say “It’s only just begun”?
To be honest, the storms brought by Luna, 3AC, and FTX over the past year have been terrifying—but they haven’t gone far enough:
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Tokenomics designs that acted like stimulants fueled the DeFi Summer and the musical-chairs-style NFT craze, habituating too many to chasing “easy money.” But once the profit motive fades, stripping away farmers and bots, crypto use cases severely lack genuine users.
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The collapse of large centralized entities that manipulated markets seemed to shake off blind faith in “too big to fail” institutions, but hasn’t shattered the illusion of profiting by following or relying on giant centralized players or whales. From exchanges to mega funds, centralized giants’ influence in primary and secondary markets has become increasingly concentrated—and clearly exploited for arbitrage.
Thus, we have reason to remain cautious about industry development.
No pain, no gain. Although crypto entered a downtrend last year, every time I see debates analyzing whether we’ve hit a bear market bottom through market sentiment and historical trading patterns, my head hurts: If the key driving force behind our great industry ultimately relies on market sentiment and long-term cycles, with technological breakthroughs and user adoption merely side effects, then this industry truly doesn’t deserve the word “great”.
It’s time to return to fundamentals, back to common sense. In my view, for the foreseeable future, we should roll up our sleeves and focus on these areas:
(1) Innovative solutions enabling ordinary users to “effortlessly” use crypto technology and securely self-custody assets (including data assets). These should include seedless key management, social-recovery self-custody solutions, convenient and secure signing or on-chain information verification toolkits, and lightweight, easy-to-run blockchain clients/nodes. This is key to achieving a “hockey stick” growth in real crypto users, and foundational for helping so-called “Web2 users” gain confidence in controlling their own assets and embracing “personal sovereignty.”
(2) Advancing groundbreaking blockchain scaling solutions from “proof-of-concept” to actual engineering implementation. Scaling tech will long remain the crown jewel of blockchain innovation. Over the years, various scaling approaches have been proposed and refined, but engineering execution remains slow. The industry needs more developers with strong technical skills to accelerate this.
(3) Leveraging on-chain tools, new social platforms, and reputation systems to effectively organize skilled “professionals” to consistently contribute in specific niche knowledge domains—this could be the breakthrough enabling average people to truly participate in DAOs. The more vertical the field, the easier it may be to boost engagement, recognition, and long-tail effects.
(4) Rediscover and promote “crypto-native” spirit. Only when more people understand that crypto’s original and most meaningful driving force lies in protecting freedom and individual sovereignty will the market move beyond speculation (though speculation remains one important game mechanic) toward sustained, diversified development. This path will be long and winding—but it’s the only way forward.
Sun Yuchen (Justin Sun), Founder of Tron, Global Advisor of Huobi
I think if a bull market returns in 2023, Asian forces—especially Chinese—will play a crucial role.
Looking back at the three bull markets in 2013, 2017, and 2021, Asia—particularly China—played a significant role in the first two. 2021 may have been the only U.S.-dominated rally. So, I believe that if the crypto industry is to recover from this bear market, the most important factor will be Asian crypto power.
Meanwhile, I think DID (decentralized identity) will become an interesting sector in 2023. I’m bullish on decentralized identity, as it closely connects with exchange KYC, citizenship, and on-chain real-name authentication.
Shen Yu (Cobie), Founder of Cobo
1. Scalability driven by performance is one of the biggest赛道in crypto’s future. From 2017 until now, the main direction remains multi-layered networks. Among Layer 2s, ZK has the highest chance of winning, though final deployment and adoption may take a long cycle.
2. The balance between private key security and usability in crypto has long hindered mass user growth. With over five years of traditional capital inflow and new users joining—whether via GameFi or apps like StepN—keyless wallets based on MPC can better balance user experience and entry barriers.
3. As blockchain performance and private key management improve, decentralized finance on-chain—including decentralized derivatives exchanges—will gradually rise, leading to new iterations in DeFi interaction models and possible forms.
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DEXs are relatively mature; with ZK going live, order-book models will gradually improve.
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On-chain futures and options derivatives could be the next growth frontier.
Garlam, Partner at Momentum 6
The death of systemic counterparty risk?
In 2022, we saw the fragility of the entire crypto ecosystem. Misuse of customer deposits, multiple Robin Hood-like incidents… Behind those so-called “safe” stable-yield products lay murky liability webs from companies already rotten inside.
Before 2022, centralization dominated crypto spot and derivatives markets, with core financial functions—custody, lending, liquidity provision, settlement—all bundled within a few platforms. We expect this to shift post-2023.
From top hedge funds and fund managers, we anticipate a more decentralized market where assets and capital no longer concentrate on centralized exchanges. Crypto assets will be held across diverse vaults, with intermediaries serving as facilitators for lending, custody, settlement, and liquidity in an interconnected yet independent network—collateral and systemic risks kept separate between entities.
As liquidity becomes more decentralized, aggregators (DEX aggregators, OEMS traders, cross-chain aggregators, OTC providers) will play a bigger role in supplying market liquidity. And as these players expand, licenses, regulations, and institutional relationships will grow increasingly important.
Dabing, ConsenSys
"If there are no major global shocks (war/pandemic/alien invasion), 2023 might not be particularly surprising. Projects that didn’t raise enough in the bear market will face bankruptcy or acquisition. Those that raised funds but mismanaged them will also fizzle out.
Teams surviving without breaking free from the past two years’ bull-market mindset (launching tokens, mining, selling meaningless pictures) will barely survive. Which teams can thrive unexpectedly? I see two types:
(1) Teams with original thinking: Like the recently popular EigenLayer, applying a simple technical model (restaking) to give ETH unprecedented financial meaning. Such original ideas will bring new growth points in 2023. So stop blindly copying existing projects or chasing zero-knowledge proofs just because they’re trendy.
(2) Teams with exceptional execution ability: These teams find growth opportunities even in bear markets. They miss no client big or small, seize every chance to promote themselves—even if met with indifference—and keep radiating energy. When hitting product bottlenecks, they professionally diagnose root causes and fix them swiftly. People always ask when crypto will go mainstream—I think it’s not sudden, but slow and steady, then all of a sudden. We’re still in the ‘slow and steady’ phase. Good news: Apple is now cracking down on crypto, which means we’ve grown significantly compared to before.
0xminion, GBV Capital
2023 will be a year for building and iterating ideas. It may be slow and grueling. Startup valuations will further decline to reasonable levels. Projects aiming to survive the winter may need to lower valuations to fundraise and relocate to cheaper regions (like Southeast Asia) to stay alive. Now is the time to learn hard skills—we must build and patiently wait for the next bull market.
Teng Yan, Delphi Digital
Despite being deep in a bear market, NFTs remain far more popular than 18 months ago. As more creators, brands, and communities develop their Web3 strategies, NFTs could capture greater mindshare. In the coming years, we’ll see a wave of creators, celebrities, and sports brands launching NFTs—an NFT explosion.
Entering 2023, I’m eager to see continued progress toward broader mainstream NFT adoption. Major tech companies like Apple, Meta, and Reddit have recognized and embraced NFTs, bringing hundreds of millions of users. More big brands will integrate NFTs into their business models—Starbucks using NFTs for loyalty programs is a great example, with 27 million loyalty members in the U.S. alone.
Fashion, music, art, fandoms, and gaming all have strong NFT use cases. Each will follow its own path, potentially reshaping the entire market. Gaming will be the next frontier, fashion will take longer, and music likely the slowest.
Alex Svanevik, CEO of Nansen
Some Singapore-based crypto companies will relocate back to Hong Kong.
Kyle Reidhead, Founder of Web3 Academy
1. NFT utility > speculation. NFT trading volume in USD hasn’t reached 50% of its previous bull market ATH, yet I believe NFT minting/trading volume will surge to ATH or higher.
2. U.S. approves regulation on stablecoins. The U.S. does this to enable dollar usage across global crypto rails, facilitating worldwide flow and adoption. I also believe no other crypto/Web3 regulations will pass in 2023.
3. Reddit brings 50 million into Web3. They already onboarded ~4 million in 2022. When they launch community tokens and more NFT avatars/collections, I expect massive Reddit user migration to Web3.
4. Biggest brands enter Web3: Amazon launches an NFT marketplace with native wallet; Apple adds a crypto wallet inside Apple Wallet. I hope both wallets are non-custodial.
5. Real-life (IRL) adoption: A small country adopts blockchain tech (likely zk-based) for citizen ID/voting. If I had to bet, I’d guess it happens on Polygon.
6. Twitter evolves into a social hub. Twitter becomes the most influential Web2 social platform and best monetization platform for creators. I believe Musk can build highly effective teams and elevate tech to another level. Not directly Web3-related, but this will impact Crypto Twitter.
7. Some good games launch—AAA-level Web3 games (on Immutable or Polygon)—each gaining 10 million new wallets. I don’t expect a 2021 Axie-style “play-to-earn” scenario, but a genuinely great game possibly incorporating tokenomics for rewards.
8. Lens Protocol surpasses 1 million active users. Currently in closed beta, I assume they’ll launch publicly in 2023, drawing most Web3 natives to the platform.
Evans, Head of Investment at Huobi Ventures
1. Last year was about trusting traditional centralized institutions; this year saw the collapse of trust in crypto-native centralized entities. Rebuilding traditional institutions’ trust in crypto will take longer. New economies may accelerate their embrace of crypto amid macro weakness or even recession.
2. Regarding overall sectors, the exchange赛道has seen renewed opportunities. Older exchanges struggle to prove asset reserves. New entrants that can decouple banking from trading/settlement without hurting UX could capture solid market share in the next bull run.
3. Digital Entertainment ecosystems are my primary focus. There are infrastructure middleware opportunities here—e.g., MPC+TSS for authentication, white-label NFT marketplaces, quality on-chain content (currently focused on gaming), on-chain content publishers, user profiling based on content, etc.
4. On infrastructure, I’m less expert, but I think most Layer2s will converge toward a similar endgame—Layer2-as-a-service. After stabilizing market share, existing Optimistic Rollups will gradually launch their own ZK Rollups. Keep an eye on leading OP Rollups like Arbitrum and Optimism—they launched earlier and have accumulated substantial capital and project resources. Ultimately, both L2s and new L1s must prove scalability matters—whoever captures the killer app gains advantage in the next cycle.
5. Zero-knowledge领域valuations remain very high, but very few protocols have achieved real-world deployment.
JX, Partner at OFR
1. Several zkEVMs promise mainnet launches next year—a major positive for the EVM ecosystem, potentially triggering a ZK Layer2 boom after EIP-4844.
2. Infrastructure progress still needs application innovation to drive it. Current narratives are deflating due to market conditions; users and investors favor apps with real protocol revenue and real users. Meanwhile, demand for decentralized asset custody is rising amid exchange regulatory and security concerns, driving more users toward smart contract wallets—these are defensive plays for bear markets.
3. Offensive applications still depend on liquidity—pigs fly when the wind blows. No clear offensive赛道is visible yet—the more abstract, the better. Likely won’t emerge until late 2023.
Alen, Partner at Y2Z Ventures
1. The environment for "network state" narratives is accelerating formation; basic payment demand sets a new floor for the digital currency industry.
(1) Dual development from fiat on-ramps to no off-ramping needed: With the dollar remaining strong, third-world countries facing currency depreciation and high inflation will increase demand for USD stablecoin storage. More Latin American and African nations will officially support digital currencies, offsetting reduced stablecoin demand caused by high U.S. debt yields. Digital nomads seeking optimal livability hubs (cost of living, climate, time zone, taxes) will drive demand for crypto payments, spawning startups offering related services (crypto cross-border payment cards/credit cards, health insurance, flight + NFT Visa integration, etc.). Until new narratives emerge, booming basic payment demand becomes the industry’s new baseline.
(2) Cities or communities of digital nomads will begin issuing their own NFTs + community tokens from the ground up, and start exchanging them.
2. L2 tech matures, setting the stage for a super-app by year-end that transcends geography and Web2–Web3 boundaries, providing a new ceiling for Ponzi-driven crypto industries.
3. With the super-app emerging and rate hikes pausing, a new bull market begins in H2 through year-end.
4. MEV evolution + super-app emergence turns RPC into a new implicit tax collector—shifting from last year’s explicit gas-tax model (“users multiply chains”) to capturing MEV via monopolizing user RPC calls, creating a more replicable business model.
5. Narratives of AI arrival rise, accelerating decentralized computing resource projects as people realize they cannot physically stop AI evolution. They realize this process began the day Bitcoin was born—until now only the first half—and they’ve unwittingly become AI agents and traitors. After exhausting productivity, spiritual and esoteric trends explode.
Wang Xi, Partner at BI XIN Ventures
Looking ahead to 2023, we’ll focus on two directions:
1. Infrastructure projects fostering mass adoption of permissionless and decentralized networks;
2. Innovative tools and applications attracting billions of new users while developing sustainable economic models.
We’ll pay close attention to these sub-sectors:
(1) Public blockchains, focusing on technical progress around rollups and modular blockchains (e.g., Arbitrum, Optimism, Celestia, Subspace), improving current Web3 user experience. We’re also bullish on high-performance, high-throughput, low-cost blockchains for viable commercial platforms (e.g., Aptos, Sui);
(2) Middleware: As base-layer blockchains scale, we expect decentralized storage, staking, permissionless oracles, trustless bridges, and non-custodial solutions to play major roles, potentially decoupling existing business systems;
(3) Application layer logic centers on “user-centric design and value-add”: We hope to see more innovative designs in DeFi for asset issuance, trading, and asset management—not mere replication;
(4) Blockchain gaming: We believe the next wave will focus on enhancing gameplay via blockchain—ownership, interoperability, esports—but teams must carefully balance playability and financialization;
(5) NFTs: NFTfi (valuation, liquidity, lending, leasing) is a hot area of community exploration. We’re open to practical NFTs tightly integrated with Web2, promoting wider acceptance of decentralized digital asset ownership.
Jun Yu, Partner at ANT Capital
1. ZKP will shine beyond Layer 2.
By recording computation processes within ZKPs, trustless use of results significantly improves cross-chain interoperability and off-chain computation.
2. Web3 user onboarding will achieve Web2-like experience.
There are now many wallet projects lowering entry barriers—from Ethereum to Move-based new chains. Whether account abstraction or MPC-based, we expect passwordless logins, social recovery, and simplified transactions to become widespread in 2023.
3. Exchanges will become more transparent and decentralized:
The FTX incident deeply wounded the market. Centralized exchanges combining custody, trading, and settlement carry high moral hazard. Exchanges are already publishing proof-of-reserves; this transparency trend will intensify in 2023, and we may even see CEXs separating custody and settlement functions.
4. MEV will receive greater attention:
After The Merge, validators replaced miners in securing Ethereum. Correspondingly, the MEV market changed significantly—MEV-Boost delivers higher income to validators. As on-chain activity rebounds in 2023, MEV’s income boost to validators will become more pronounced, increasing focus on decentralizing and “de-trusting” the MEV market.
5. Market attention will return to the application layer:
After the infrastructure boom, the bear market inevitably prompts the soul-searching question: “What can blockchain actually do?” Thanks to built-in economic systems, gaming is likely the next breakout application after finance.
Aiko, Folius Ventures
1. There will likely be some genuinely great games that stand out in gameplay, delivering new experiences through internal economic loops. Many teams seem to have moved past earlier awkwardness, becoming willing to continuously learn and innovate business models. Previously, they felt forced to either cater to Web3 speculators or reject Web3 entirely—but now we see more teams finding a healthy balance.
2. Looking at the application layer overall, despite more gameplay options (intersection of traditional To-C and Web3) and more talent, much remains superficial—similar to post-Axie GameFi. First, consider real needs and user experience; second, rethink fundamental business model innovation; third, identify compelling social hooks during execution; finally, many critical details remain at the UI/UX level. So, more time is needed for accumulation and development.
Mushroom, Founder of ChainBase
Some views extend beyond 2023.
1. Industry
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The industry needs more applications. Everyone awaits the next super app. The number of Web3 application-layer entrepreneurs will grow over the next two years;
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Fat apps eat fat protocols. Unlike USV’s past “fat protocol, skinny app” thesis, as apps evolve into super apps, they transform into vast ecosystems—including super chains, super xxfi—capturing maximum value, while protocols become parts of the super app ecosystem;
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Overall market pessimism will persist, market cap continues downward, but developer growth and enthusiasm remain undiminished;
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The top companies in the future Web3 world will be those founded in recent years;
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Traditional internet companies show growing interest, gradually introducing packaged “Web3” concepts for interesting experiments in suitable scenarios.
2. Exchanges
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CEFI issues have revealed opportunities for decentralized exchanges. DeFi will continue growing alongside CeFi consolidation.
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Stronger regulation, operating under established rules.
3. Security
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Blockchain security firms remain favorites among most VCs.
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Auditing is now table stakes for blockchain security firms. More effort will shift toward discovering scalable product opportunities.
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