Having now made it through the first six months of 2023, with dramatic changes to the crypto landscape ranging from the fall of FTX to the seemingly out of nowhere aggression of regulation on crypto in general, it's been a hell of a ride so far. So what can we expect for the second half of the year? Well, first off, no surprise, more of the same. However, with the combination of a bull run, things are suddenly getting interesting again.

Regulatory Framework Advancements

If governments get their collective heads out of a dark place, what does come out of the other end of the tunnel will most likely be a burdensome framework for how crypto is allowed to move forward. One can easily expect both the application of expensive licensing as well as heavy taxation. It's not an empty theory; local governments are making a killing now with 30 percent sales tax levies on pot sales in the U.S. The same kind of thinking can be applied to crypto. Of course, if it gets classified as income, that actually restrains the runaway taxes. However, exchanges and wallets will be heavy regulated, monitored and squeezed for taxes as well, which will then get passed down to users as higher fees.

Central Bank Digital Currencies (CBDCs)

Banks aren't sitting on the sidelines. While none have released any yet, central bank digital currencies, or CBDCs, will become standard options for digitization of the dollar. Using the banks as the means of access, the CBDCs can be pegged to the U.S. dollar without worry of slippage, but the currency can also be highly controlled by the banks and the governments. It actually makes more sense that paper currency; the government can yank or turn off digital product electronically. The same can't be said for criminals holding paper dollars. CBDCs work in favor of the direction of Big Brother control, believe it or not.

Increased Institutional Adoption

As for the big crypto coins, the main names will still be popular, but the banks and brokerage institutions will have one fundamental detail: they will control the keys, not the consumer. This particular aspect and approach has already been made popular and easy to implement by Paypal. It also aligns with the government control approach of consumer crypto. It can be taken away at any time by blocking the account's access.

DeFi Evolution

Sanctioned defi will likely continue to be thrashed where it presents big targets for regulation, but smaller outfits and those outside of the borders of problem countries, those defis can still offer viable opportunities for crypto borrowing, lending and enhanced trading. Liquidity pools and staking also offer continued passive income options as well, which will continue to be popular for those who can hunt them out quietly. The big issue defis need to resolve is their security. So far, that has been their biggest problem and continued weakness in 2023.

NFT Innovation

Non-Fungible Tokens (NFTs) continue to grow in popularity as well as their application. Art, collectibles and gaming will continue to remain strong, but other uses for NFTs are starting to germinate. They represent a very functional, proven resource for Web 3.0 projects, and NFTs can also be combined easily with physical assets. The extent to which NFTs produce more popularity will depend on the amount of creativity applied in their design and improvement.

So as we think about what the rest of 2023 is going to offer, a sustained bullrun being one of them, there's no question more change is going to happen. The high probability is that things will get even more constrained until 2024 and a change in government leadership. However, there is the slim chance some common sense might poke its head out. If that happens, it could carve a long-term path for supported crypto use. Cross our fingers that the underdog gets a chance to breakout.