On the first working day of 2023, I am very happy to share with you some of our internal views on the crypto market in 2023 and the future.

#1 Macro Capital Market

After China eases the epidemic, China and its related economies will usher in a recovery. The full recovery of industry, commerce, services, finance and tourism will inject strong impetus into the development of the East Asian economy. Obviously, on the one hand, there is an expectation of recovery of the Chinese economy, and on the other hand, there is an expectation of recession in the European and American economies. I believe that the Federal Reserve will not sit idly by, so the road to recession of the US economy will not be smooth, but the bear market inertia driven by market sentiment will still follow the venture capital market in 2023.

#2 BTC Trends

The current total market value of Crypto is 8 trillion US dollars, which has fallen by 73% from the peak of 30 trillion US dollars. The current price of BTC is 16.7K, which has fallen by 76% from the peak of 69K. BTC will not usher in a bull market in 2023, but affected by the macro market, the entire Crypto market will see monthly rebounds and shocks.

#3 AltCoins Trends

In addition to the reshuffle of the top 50 tokens by market value, 2023 will be a year in which the prices of a large number of new blue-chip projects will be under pressure. If the market fails to turn bullish, many tokens with large FDV, small circulating market value and cliff expiration, such as GMT, OP, DYDX, TOKE, etc., will fall again as they are unlocked.

Here is a list of tokens that will be unlocked in large quantities in the next year: https://docs.google.com/spreadsheets/d/1Cbt58yiBVL7_qeHTn4pFRnIV7cWgRmx8u-QJbtTGBQQ/edit#gid=1400459975

# 4 The public chain war ends, and L2 Arena opens

The battle for public chain sovereignty will evolve into a battle for Ethereum's Layer2. After EIP-4844, Layer2 will usher in a great improvement in performance, and the living space of other EVM chains will be squeezed again. For ETH, using the power of the market to develop Layer2 is a better strategy than using its own power to expand Ethereum. What the market needs is a secure, decentralized and high-performance infrastructure. Decentralisation has no monopoly. If Ethereum + Layer2 can solve the problem of the impossible triangle, do we still need Alts chain?

# 5 The application layer is still the main theme of the bull market

The narrative of the application layer will still be the main theme of the next bull market, but GameFi will not lead it. In addition to finance and games, the track closest to the virtual scene is also social. With the completion of social puzzles such as NFT, DID, Socialgraph and AIGC, SocialFi will have the possibility of explosion.

#6 The emergence of entry-level applications

Improved smart contract wallets, MPC wallets or other Web2.5 wallets with lower barriers to use will be more likely to grab more users, and the emergence of entry-level applications will bring structural market opportunities. In the end, it may not be DEX that kills CEX, but wallet applications with strong openness, compatibility, convenience and ease of use.

#7 LSD will flourish

The LSD (Liquid Staking Derivatives) market will flourish with the entry of ETH. The amount of ETH pledged has gradually increased since PoS, but compared with other earlier PoS chains such as BNB, it still has several times the room for growth. The asset market value of ETH is several times the sum of the asset market values ​​on other PoS chains, so projects such as LDO, SSV and RPL still have dozens of times of business space.

#8 DeFi derivatives

In the current market, DEFI is still the underlying layer of asset exchange at the application layer, and innovations in derivatives such as GMX continue to emerge. In the non-bull market in 2023, the opportunities for DEFI derivatives are in the decentralized options track, and structured products targeting volatility and real yields are market demands in a sluggish environment.