2023 will be a pivotal year before regulation arrives in Europe, the UK and the US. It should be admitted that the digital asset industry is not yet stabilized, DCG's situation is a perfect example; how many players are still in trouble without us knowing it? From this perspective we can consider that 2023 will be a year of industry consolidation with mergers and acquisitions from crypto players (exchanges, protocols, lenders, institutional crypto).

 It is also possible that traditional players will seek to take advantage of discounted prices and make strategic acquisitions, such as Fidelity or BlackRock's potential acquisition of DCG or JP Morgan's potential hostile takeover of Coinbase. The "accidents" of 2022 and the desire to be acquired by industry leaders may also motivate centralized players to self-regulate, increasing transparency through public financial audits and regular communication with the community.<br> 

From a macroeconomic perspective, it is expected that central banks will continue to increase rates during the first half of 2023, potentially resulting in economic recessions. However, due to political pressure, public pressure, and central banks being over-leveraged, I think that it is likely that they will accept a lower inflation rate of 4-6%, which is still higher than the past decade, in order to reduce debt and support the economy through investments in necessary infrastructure such as energy, transportation, defense, and healthcare. As a result, I believe that Bitcoin, as digital gold, will become a relevant asset class during this decade of "financial repression," as noted by financial historian Russell Napier.<br> 

Despite losing 63% of its value in 2022, Bitcoin is expected to be a major winner in the coming year. As stated by our Head of Research, James Butterfill, inflows into Bitcoin ETPs reached $287M, while Ethereum saw $407M in outflows. The successful implementation of Merge and the "Shanghai update" is expected to solidify Ethereum's dominance in the market, with the popularization of staking making it difficult for other proof-of-stake blockchains to compete.<br>

Will Solana rise from its ashes? What about Cosmos 2.0? Moreover, as far as the crypto ETPs investment vehicles mentioned above are concerned, we can predict that a part of the long-term investors will prefer to expose themselves to digital assets through this type of familiar products (ETFs being part of the ETPs family) which on the one hand avoid the management of private keys by the user, are highly regulated and on the other hand are available on all traditional brokerage platforms in the middle of stocks, bonds, ETFs and commodities. 

According to the MVRV Z-Score, it appears that we are currently in a phase of accumulation for Bitcoin. However, this accumulation is largely comprised of retail investors, as the lack of regulation has yet to encourage institutional investors to enter the still-immature industry. That being said, institutional investors are beginning to detect a demand for this new asset class from their own investors, as evidenced by the Vanguard study showing a growing interest in volatility among younger generations. It is possible that by the end of 2023, major wealth managers will once again consider the feasibility of offering crypto products to their clients, though it remains to be seen in what form these offerings will take. 

In the realm of decentralized finance (DeFi), protocols such as Uniswap and Aave are establishing themselves as key players in the industry. At the same time, decentralized platforms offering derivatives like dYdX and GMX are gaining traction, possibly due to the collapse of FTX and ongoing concerns about Binance's reserves. However, I still wonder about the scalability challenges of such projects.

Finally, another interesting point is that traditional finance today offers more interesting revenues than decentralized finance, therefore, many DeFi protocols, like MakerDAO will turn to what they call RWA (Real World Assets), that is traditional bonds or even stocks. So these protocols are no longer solely collateralized by crypto but by traditional industry assets. This is a hybridization that will be interesting to observe in 2023.

Finally, in light of the various "accidents" that have occurred in the industry this year, it is likely that the industry will adopt the same risk-mitigating tools as the traditional financial sector, including credit scoring tools, insurance, and credit default swaps (CDS). It remains to be seen how the decentralized finance industry can adopt these tools without relying on a central controlling authority.<br>