According to Fred Wilson, co-founder of Union Square Ventures, there are insolvent entities that have not been restructured, as well as funds that are so far underwater that they may have to liquidate. He predicts that such activities will result in ongoing sell pressure on web3 tokens for at least the first quarter of 2023, if not much longer.
While there are compelling values out there in web3, I am not convinced that it is safe to go back into the water just yet unless you have a very strong stomach and a very long time horizon,
he writes in his recent blog post.
He believes that large caps in web3 (mainly BTC and ETH) will begin to attract more investor interest and will perform well in 2023. He is more optimistic about ETH because it has the best underlying economic model of any web3 asset.
Like the startup sector more broadly, web3 will go through a triage of sorts in 2023. Projects and protocols that have found product market fit, have real token economics, and ship new features quickly will attract new interest and rise in value. But many web3 projects have not found product market fit, have weak or no token economics, and do not execute well and I think we will see many of them continue to flounder and fail in 2023.Wilson writes.
Over the last year, the crypto market has plummeted due to the crypto winter, as regulations have tightened, bad actors have been exposed, and large companies have failed. However, several experts and analysts believe that the market will recover next year, making now an excellent time to invest in cryptocurrencies.
Wilson predicts in his blog post on the macro environment for tech, startups, web3, and climate that central banks around the world will begin to ease up on tightening in 2023, and that startups will have a difficult year in 2023 as VCs will be much more selective. At the same time, Wilson believes that 2023 will see increased growth in this market, which serves as the underlying business model for many of the new climate startups that VCs are currently funding.
