Who Are Crypto and Web3 Companies Fighting For In 2023?

Since the dawn of the blockchain in 2008, the idea of ​​what is possible in the crypto space has changed dramatically. There has been an evolution from simple cryptocurrencies like Bitcoin to full-fledged DeFi apps, games and more.

But this evolution is not complete. As Matvey Diadkov, founder of Bitmedia.io, recently said, “The cryptocurrency market is evolving at an ever-increasing pace. However, we are in the initial seed stage where the foundations are laid and norms are established.”

Today, the crypto industry is facing even more seismic changes. Web3 is pioneering numerous changes in the way it is used for advertising and entertainment. Governments around the world are looking for ways to regulate various aspects of the industry.

With the growing global eye towards blockchain technology, there is one question on everyone’s mind: What’s next?

While we don’t have a crystal ball to look into the future of the crypto industry, we can make some educated guesses by looking back.

Early US crypto dominance

It should come as no surprise that many of the early pioneers and practitioners of the crypto industry came from Silicon Valley. Big players like Andreessen Horowitz, Coinbase and Ripple Labs have their roots here. And countless influential voices came from the west coast of the USA.

But that’s just one of the reasons why the United States plays such a dominant role in crypto’s story.

The USA is home to dozens of large companies, the world’s largest stock market, and unique financial and technological infrastructures. Also, the country’s legal and regulatory environment tends to be friendly towards entrepreneurs and start-ups.

In many ways, the United States was the perfect incubator for blockchain. This is why the vast majority of crypto projects are launched and targeted in the English speaking world. The United States, Great Britain, Canada, and Australia were the dominant players in crypto.

But all that started to change after the collapse of FTX.

The fall of FTX and the rise of crypto regulations

In the summer of 2022, FTX was running high.

Earlier that year, they made several headline-worthy announcements, including the establishment of a $2 billion venture fund, plans to offer stock trading to US clients, and the development of a gaming division. The future looked bright for the company and the crypto industry as a whole.

But then, in November, things started to unravel. And in the middle of that month, the huge stock market and hedge fund filed for Chapter 15 bankruptcy.

CEO John J. Ray III, who was brought in as a liquidator, summed up how bad things were: “Never in my career have I seen corporate controls fail so utterly and reliable financial controls so utterly gone.”

The collapse of FTX caused shock waves in the crypto industry. Governments around the world are starting to take the possibility of imposing tighter regulations on cryptocurrencies and projects more seriously. And since the fall of FTX took place under US oversight, lawmakers there were even more eager to “do something.”

While comprehensive crypto regulations have yet to be passed, uncertainty over the future of cryptocurrencies in the US has prompted entrepreneurs and investors to seek other options. Many people interested in the crypto space are rethinking their plans for the US, considering South America, the Middle East, and Asian countries instead.

U.S. Senator Cynthia Lummis (R-Wyo.) recently put the situation in perspective, saying, “The failure of the United States Congress to enact policy is pushing the industry to other countries. Europe is ahead of us in terms of its regulatory framework. Australia and the United Kingdom are ahead of us. Switzerland is way ahead of us.”

According to Brad Garlinghouse, CEO of Ripple, the crypto industry is already one step ahead as it moves towards greener pastures overseas.

While some voices in the industry are less confident in this geographic shift, noting the US’s history as a technological and economic leader, there is no doubt that choppy waters lie ahead.

Change comes one way or another.

Changes in the crypto industry

Examining the history of blockchain usage allows you to see that it has followed a natural progression. It started with cryptocurrency, one of the most intuitive and obvious applications for the digital ledger.

Once cryptocurrencies were a thing, it only made sense to create cryptocurrency exchanges. However, what made it possible to move beyond currencies to fully functional applications was the introduction of smart contracts by Ethereum in 2014. This is when decentralized finance (DeFi) projects are starting to emerge.

But my evolution didn’t stop there. There was too much potential in the blockchain to end up with static assets. The gamification of the blockchain was inevitable.

In the past year or two, the crypto industry has seen a burst of growth by GameFi of the crypto world. This can be clearly seen from the data provided by Bitmedia, one of the leading advertising networks in the blockchain industry.

Founder of Bitmedia Matvey Diadkov“By 2022, the top three ad campaign niches were crypto exchanges, NFT metaverse games, and gambling betting projects. Since then, the number of GameFi and gambling betting projects has grown significantly and has risen to the top of the charts.”

The chart below reveals how much the industry has changed over the past year. Beginning in 2023, crypto exchanges fell from 35% to 20% of ad placements, replacing gambling projects. Gambling projects increased from 15% to 35%. This led to exponential growth as the gambling side of the industry was unaffected by the regulations.

All of this is indicative of a major shift in the industry and bodes well for those involved in the gaming industries of the blockchain.

Distribution of crypto advertising campaigns by niche.

before 2022	%	in 2023	%
Cryptocurrency Exchange/ DEX	35	Bet	35
NFT Games	15	Web3 Project	25
Bet	15	Cryptocurrency Exchange/ DEX	20
Web3 Project	10	NFT Games	10
Other	15	Other	10

This is especially true in parts of the world where crypto has not had a strong presence until more recently. Again, Bitmedia’s data helps here. The best positions for Web3 advertising have moved more and more eastward.

Before 2023, four of the top five countries were native speakers of English, and the fifth, Singapore, uses a form of English as its unofficial language. By 2023, four of the top five countries for Web3 advertising were in southeast Asia and a fifth in Africa.

This signals a big change in the industry. And something that shows no signs of slowing down.

Top geolocations for web3 advertising. Bit media data:

before 2022	in 2023
USA	Philippines
Canada	thailand
England	Vietnamese
Australia	Indonesia
Singapore	Nigeria

According to a study by CoinGecko, the most consistent interest in GameFi came from the East Asian region, including South Korea, Hong Kong, and China.

Countries Most Interested in Web3 Games

1. Philippines 🇵🇭
2. Nigeria 🇳🇬
3. Pakistan 🇵🇰
4. Singapore 🇸🇬
5. Vietnam 🇻🇳
6. South Korea 🇰🇷
7. Hong Kong 🇭🇰
8. Netherlands 🇳🇱
9. China 🇨🇳
10. Kenya 🇰🇪
11. Lebanon 🇱🇧
12. Nepal 🇳🇵
13. Sri Lanka 🇱🇰
14. India 🇮🇳
15. UAE 🇦🇪

— CoinGecko (@coingecko) May 17, 2023

As interest in GameFi grows worldwide, there will be a growing number of opportunities for crypto investors and startups. Matvey Diadkovnoted this growth and increased potential to capitalize on advertising space.

“Using an open-source distributed ledger (or blockchain) will allow users to verify the reliability and validity of the people involved, their history, and interactions with others. Fake accounts or suspicious individuals with no history can be easily detected by publishers and gaming platforms who can see which accounts are trustworthy and have a lot of interactions with other members of any blockchain.”

Diadkov continues: “The benefits, however significant, go beyond mere transparency and accountability; furthermore, the new data will provide greater budget effectiveness as it adds an extra layer of precise data that can be used to tailor ad campaign targeting on a molecular level”.

looking back and forward

Industry-related crypto adoption and regulation are different forces that are not always aligned with each other. Sometimes, regulations lag behind adoption. In other cases, they lead. Much depends on the infrastructure and the types of arrangements proposed.

But one thing is clear: Both of these factors play an important role in the development of crypto businesses around the world. This can easily be seen by taking a brief look at the development of the crypto industry to date.

As we face uncertain waters in terms of both crypto adoption and regulation, we must acknowledge the challenges and opportunities. Regulatory concern will continue to have an impact on where crypto projects spawn. The competition offered by these new projects will also affect the future of the industry.

With all that said, now is the time for entrepreneurs to find a niche where they can grow. There has never been such an easy and inexpensive time to do this. Also, the rise of new geographies of demand is emerging as an additional layer of opportunity that is once again helping blockchain adoption and thus the world.