Will the crypto industry grow beyond speculation in 2023?
The FTX collapse was a pivotal point the cryptocurrency industry needed to grow beyond just a speculative asset class, Ledger’s Alex Zinder says.
Welcome to Forkast Forecasts 2023. In this series, leaders, innovators and visionaries in blockchains share their industry predictions for the year ahead.
Alex Zinder is the global head of Ledger Enterprise, a crypto asset hardware wallet developer
Zinder spent over 15 years working with emerging technologies. He has previously served as the director of global software development at Nasdaq.
Predictions for 2023
Crypto will grow beyond just a speculative asset class
“Crypto took a bit of a hit earlier in the year. Part of that was the causal effect of other events like FTX and some of the hacks that we’ve seen… This was a very important and pivotal turning point in the history of crypto overall. What I envision now and what Ledger is extremely well positioned to help support and drive forward is that the crypto ecosystem is going to start to pivot from speculation to value creation… We’re going to see a lot of major brands and organizations start to build in the ecosystem versus just coming in to trade and speculate. That is going to be a critical shift in how the ecosystem continues to grow.”
Self-custody will protect investors from black swan events
“The FTX event is something that, frankly, there is no reason for the crypto industry to repeat again. There’s a very healthy realization of that and the industry as a whole because today solutions exist for us to prevent something like FTX from happening… There are two very straightforward trajectories that the industry needs to follow to prevent something like FTX from happening in the future. One obviously is self-custody. We need to continue to educate the retail audience. We need to continue to invest in self-custody-based solutions… Even if somebody like FTX goes out of business and this happens today, and then their traditional finance companies go out of business, they make bad decisions, but their users are protected. And we can do that in crypto with self-custody.”
Crypto service providers will need more user safety standards
“So the second dimension that we really need to capitalize on is governance? If an organization is in the business of managing other people’s money, there needs to be a certain level of standards globally available to prevent something like FTX from happening again… These are standards that are well-known and established in the financial industry today. They’re applicable to crypto. They’re global in nature, and the tools exist. The tools for transparency, for proof of reserves, for validating that you’re maintaining your clients’ assets in the right ways, right governance, making sure that a single bad actor that makes a bad decision doesn’t get to actually execute on that bad decision. There are checks and balances in place at the corporate governance level as well as security, just pure fundamental security to make sure that a bad actor cannot take advantage of a gap in security, a gap in governance, and maliciously act in the interests of themselves versus in the interest of the clients.”