Crypto

4 “Emerging Narratives” in Crypto to Watch: Trading Company

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Despite a turbulent year full of crypto meltdowns and price declines, Steven Goulden, senior research analyst at crypto trading firm Cumberland, pointed to several “green shoots” to break the crypto surface in 2023.

In a 14-page “Year in Review” report published Dec. 24, Goulden said he saw four “emerging narratives” in 2023 that will lead to “meaningful progress” for crypto over the next six to 24 months.

These include non-fungible tokens (NFTs) becoming a “go-to method” of tokenizing a brand’s intellectual property (IP), Web3 apps and games becoming “really popular,” while Bitcoin (BTC) and ether (ETH) could become more commonly used as a country’s reserve asset.

Goulden argued that while NFTs have so far been “largely confined to the art space”, he believes the next step for NFTs will be the marriage of NFTs and a brand’s intellectual property.

The analyst noted that many non-Web3 companies are already making “significant progress” to monetize intellectual property and improve customer engagement using NFTs.

These include Starkbucks’ partnership with Polygon to generate NFTs for Starbucks customers, and Launch of the Swoosh by Nike, which allows users to design custom sneaker NFTs.

“Listening to these companies talk about Web3 initiatives, it’s clear they see digital engagement with customers and fans as a new aspect of the retail experience,” Goulden said.

He also noted that “selling NFTs to retail users has the potential to generate significant, high-margin revenue.” Nike is a classic example, having generated $200 million from digital sneakers alone. The analyst expects Polygon’s MATIC, LooksRare’s LOOK and 0xmon’s XMON token to lead the way on this front.

CryptoKicks digital shoes from Nike and RTFKT. Source: Nike.

The Cumberland analyst also said that NFTs would become a “go-to method of tokenizing intellectual property,” sharing that there are approximately $80 trillion in intangible assets on corporate balance sheets today.

Real-world utility apps to gain traction

Goulden also sees adoption of Web3 platforms providing “real world utility” beginning to gain traction in 2023, acknowledging that it has been “extremely difficult” to disrupt Web2 monopolies thus far:

“The reality is that it takes time to build and get started on projects like these, so we anticipate hardware traction is likely 12+ months away, with serious user adoption likely in 2-5 years. .”

Some “genuinely useful real-world platforms” that Goulden pointed to included the Braintrust IT recruitment platform, the Helium Internet of Things protocol, the GPU rendering service Render, the global mapping project Hivemapper, and the carpool Teleport.

Web3 games to attract “serious” gamers

The analyst was also optimistic about the Web3 games market, noting that there are approximately three billion gamers worldwide, of which 200 million are “serious” – representing $200 billion to $300 billion in total addressable market.

“[…] yet these users typically do not own game assets and have little control or governance over these game ecosystems,” Goulden said.

Related: 5 cryptocurrencies to watch in 2023

Goulden says the play-to-win aspects of blockchain-based gaming will result in significant profitability for developers, but added that because it takes “about 2-3 years to build a triple-A game (blockbuster of the highest quality)”, we probably won I don’t see a “Web3 game that becomes a star” until 2023 or 2024.

Web3 games market figures. Source: Mushrooms.

BTC and ETH as reserve assets

Finally, the research analyst suggested that special attention should be paid to the potential role of BTC and ETH as a reserve asset, especially for export-oriented countries.

Goulden said many heavily exporting countries around the world may choose to supply its reserves with alternative assets like cryptocurrency instead of US Treasuries as a means of lower their own currency against the US dollar.

“Even a small central bank allocation to BTC or ETH would be significant and likely lead to other exporting states following suit.”