Ex-Meta crypto head expects crypto winter to drag through 2024

Hull Invest

Bitcoin (BTC) payments firm Lightspark founder David Marcus has predicted a bearish cycle likely to continue through 2024, leading crypto bulls to expect a quick recovery in the cryptocurrency market. disappointing the faction. blog post On December 30th, Marcus, co-creator of Meta’s defunct crypto project Diem, wrote:

This “crypto winter” won’t end in 2023 and probably won’t end in 2024 either. ”

He added that it will take “several years” for the crypto market to get over the “abuse of bad players” and proper regulation to kick in. Profile bankruptcy also requires several years to rebuild.

Crypto firms that failed in 2022 include hedge fund Three Arrows Capital (3AC), lenders Voyager Digital and Celsius Network, the latest FTX, and lender BlockFi. The bankruptcies of these companies affected millions of users and collectively lost them at least $10 billion.

Marcus called the “rapid demise of the House of Cards style” of cryptocurrency companies a repeat of “Wall Street’s greedy early ugliness.” Specifically, FTX’s downfall added “hugely unnecessary drama” to an already disastrous year, Marcus noted.

On an optimistic note, however, Marcus added:

“…Finally I believe this [long crypto bear market] In the long run, it will prove to be a profitable reset for legitimate industry players. ”

Marcus’ prediction that the cryptocurrency winter will continue suggests that the next halving, which is expected to occur in 2024, may not lead to a bull market for Bitcoin. Historically, BTC has enjoyed bull markets throughout 2012, 2016 and 2020, the halving.

Regardless of whether the cryptocurrency market recovers by 2024, Marcus said “years of greed” will give way to “real world applications.” he said:

“The days of making tokens out of nowhere and making millions are over. The music has stopped.”

The cryptocurrency market is returning to its normal state of “creating real value and solving real-world problems,” wrote Marcus. Marcus expects this to lead to increased innovation in 2023, especially in zero-knowledge (ZK) applications such as payments, asset securitization, decentralized finance (DeFi), proof of reserves, and layer 1 scaling solutions. I’m here. He also added that 2023 may see the Bitcoin network gaining traction again.

Additionally, Marcus expects the Bitcoin Lightning Network to show its potential as “the most effective open, interoperable and affordable real-time payment protocol in the world” in 2023. However, Marcus warns that this prediction could be selfish as his company LightSpark, backed by the a16z crypto and paradigm, is working to extend the utility of Bitcoin through the Lightning Network. did.

Extensive Market Forecasts for 2023

Marcus expects the ongoing free speech debate to grow in 2023, sparked by Elon Musk’s Twitter takeover. Marcus wrote that various groups will continue to fight to define free speech and debate what content should or should not be moderated.

Discussing the economy as a whole, Marcus said interest rates will continue to rise through the first half of 2023. As a result, borrowing will become more expensive, and companies without a clear path to profitability will continue to struggle to raise capital.

Marcus warned that while higher interest rates would “calm” inflation, the risk of a “full-blown recession” was too high. Additionally, Marcus said tech layoffs will continue in 2023 as companies find leaner and more efficient ways to operate.

On the regulatory side, Marcus expects uncertainty to persist into the next year. he said:

“We need clarity and new regulations for digital assets/crypto, guidelines for social media companies on content moderation, and guardrails for AI. [artificial intelligence] innovation. Sadly, I am increasingly skeptical of our ability to reach agreement on a legislative or regulatory approach that will achieve the right balance in these areas. ”

As regulators ponder options and delay legislation, industry leaders have a responsibility to “do what they believe is right in the void left by a stalled legislative system,” he said. Marcus writes.

Finally, Marcus said technology will continue to be at the forefront of solving “humankind’s greatest problems.” Bitcoin mining, for example, which is often criticized for being environmentally harmful, has proven its critics wrong by regulating demand across the power grid and trapping methane. The pace of renewable energy adoption is also picking up, Marcus said.

2023 Will Be The Year For Crypto Builders

The collapse of a company believed to be at the forefront of crypto market growth hurts trust, stability and value, feeding crypto critics in 2022. Created opportunities to build new.Added:

“We will come out stronger and better from this era, but it will take patience and determination. There is no doubt that the next few years will continue to be challenging, but for those who find the will to move forward. , will be an incredibly rewarding and fulfilling year.”

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