Will Cryptocurrency Still Be Relevant in 2023?

While 2021 showed rising trends for cryptocurrency, the many events of 2022 led to a downward trend – particularly when entering the second half of the year.  With many businesses interested in expanding into cryptocurrency by either accepting it for transactions or simply looking to invest, cryptocurrency and its volatility are a hot topic. The question is, will cryptocurrency still be relevant in 2023?

Yes, cryptocurrency will be relevant in 2023. With such a large market and a prediction claiming that cryptocurrency markets with rise, it would be concerning if cryptocurrency became irrelevant – despite the bitcoin price losing almost 70% from its all-time high set in late 2021.

How Will Small Businesses be Affected by Cryptocurrency?

Ultimately, small businesses will need to make the decision of whether or not they will begin accepting cryptocurrencies in their transactions. According to data from Skynova, 32% of U.S. small businesses currently accept crypto. While there are benefits – such as:

• Lower transaction fees
• Merchant protection reduces the risk of fraudulent chargebacks
• Increased sales
• Convenience for customers

There are also risks associated with crypto transactions – for the moment. 2023 may be the year that regulations are clarified for businesses and security is improved. Still, the decisions remain with the business owner. Carefully consider the benefits and consequences, as one small business may benefit more from expanding to crypto transactions than another simply based on their target audience and product.

Are Small Businesses Being Misled?

When considering cryptocurrency and its effect on your business, the first thing you should consider is the risk. There is no definitive answer, only predications from the mouth of experts. It’s up to you to do your own due diligence on the specific crypto and financial situation of your business before making decisions (although your accounting department should be able to help). 

With experts claiming huge leaps between now and 2025 in crypto prices and others claiming we’re headed into a “crypto winter” due to an impending recession, it remains to be seen if crypto will be a lucrative option in the near future. 

Cryptocurrency and Taxes in 2023 

The Biden administration has proposed a few changes to how cryptocurrencies are managed and taxes that will kick off after December 31st, 2022. This will include new reporting rules for digital assets – most cryptocurrencies and potentially some non-fungible tokens (NFTs). 

To better understand what is considered a digital asset and how it may affect your taxes, consult with your accountant or tax advisor.

What Type of Preparation Can I Do Now to Prepare for 2023?

One of the key elements of a successful business is being able to view trends and financial changes before they occur. The best preparation you can do now is to prepare for 2023 and the possible changes crypto transactions may incur on your business or customer base.

Monitor trends, monitor the market, and inform your accounting team of your goals or intentions for the future – whether that includes or does not include the acceptance of cryptocurrencies. Lastly, ensure that your accounting process is running smoothly before making decisions – virtual finance departments are typically able to make adjustments in managing your books quicker than locally hired or in-house accountants.