The cryptocurrency industry is optimistic about its success in 2023 and is placing a lot of money on governmental regulations and raising public knowledge of its potential as a store of value.
December was a calm month for cryptocurrencies, with low volatility and little price change. It was a tranquil end to a dreadful 2022 for Bitcoin and other major cryptocurrencies.
Markets are still paying attention to the drama surrounding the demise of the cryptocurrency exchange FTX, including Sam Bankman-Fried arrest and extradition in December. Meanwhile, renewed calls for tighter regulation of the cryptocurrency industry have been made in response to FTX's collapse.
Cryptocurrency news predictions today signal that investors will face further challenges in 2023 as rising interest rates continue to pressure the value of risky assets.
After suffering a severe financial setback last year, the cryptocurrency sector is anticipating a robust recovery this year as new rules become effective, enhancing the security of the cryptocurrency market. There are also some announcements concerning international crypto law and framework collaborations and synergies across governments.
Before tackling some of the best crypto predictions, here's a quick recap on last year's crypto state.
Looking back: What Just Happened last December?
After FTX filed for bankruptcy, Bitcoin values fell to fresh two-year lows of under $15,600 in November before stabilizing in December.
In December, bitcoin prices rose 1%, reaching a peak of $16,500 in 2022. The price of Ethereum (ETH) fell by 1.4% more in December, ending the year at $1,199. 2022 was the steepest annual loss in bitcoin prices since the 73% collapse in 2018. In 2022, Ethereum prices fell by 67.7%.
The Crypto of winter 2022 was brought on by rising interest rates, which resulted in a wave of industry bankruptcy filings and drove down the value of the most well-known cryptocurrencies. Tron (TRON), which had the highest performance among the top 10 most valuable cryptocurrencies by market capitalization, saw a 27% fall. The worst-hit stock was Polkadot (DOT), which saw a year-over-year price loss of 83.6%.
In November 2021, the market capitalization of all cryptocurrencies reached a high of almost $2.9 trillion. The market cap for such assets is currently just $798 billion as of the end of 2022.
The FTX fall
When the once-valuable $32 billion cryptocurrency exchange FTX formally requested bankruptcy protection in November, the chaos in the market for cryptocurrencies reached a fever pitch. On November 11, CEO Bankman-Fried announced his resignation, and on November 22, FTX filed for bankruptcy in a Delaware federal court.
One day before he was due to give testimony before the House Financial Services Committee on December 13, Bankman-Fried was detained in the Bahamas on December 12 at the request of the United States government.
When the once-valuable $32 billion cryptocurrency exchange FTX formally requested bankruptcy protection in November, the chaos in the market for cryptocurrencies reached a fever pitch. On November 11, CEO Bankman-Fried announced his resignation, and on November 22, FTX filed for bankruptcy in a Delaware federal court.
One day before he was due to give testimony before the House Financial Services Committee on December 13, Bankman-Fried was detained in the Bahamas on December 12 at the request of the United States government.
A call for regulation
Following the FTX collapse, the Biden administration is once more urging Congress to impose stricter and more definite rules on the business.
The Financial Stability Oversight Council (FSOC) provided Congress with a number of policy proposals on December 16 that were targeted at safeguarding investors, preserving financial stability, and preserving national security. It advocated for legislation that would enable American authorities to oversee crypto assets traded on the spot market even though they are not considered securities and are not currently governed by the SEC.
The council also urged Congress to crack down on "regulatory arbitrage," the practice used by cryptocurrency companies to avoid U.S. regulation by setting up their operations to benefit from laxer regulations in other countries.
Cryptocurrency predictions 2023
Cryptocurrency experienced its worst performance in 2022 since 2018, but investors are looking for a repeat of the market recovery in 2023. Despite such, analysts still laid their best crypto predictions, giving the impression that such investments are still unbreakable.
Bitcoin prices are expected to rebound to between $20,000 and $50,000 in the second half of 2023, according to cryptocurrency exchange Bitbank, but only if the Federal Reserve can stop raising interest rates by mid-2023 and start lowering them by early 2024.
Bitcoin will rebound to $30,000 in 2023, according to VanEck analyst Matthew Sigel, who also cautions that it may stay in the $10,000–$20,000 area in the first three months of the year.
Cryptocurrency experienced its worst performance in 2022 since 2018, but investors are looking for a repeat of the market recovery in 2023.
Bitcoin prices are expected to rebound to between $20,000 and $50,000 in the second half of 2023, according to cryptocurrency exchange Bitbank, but only if the Federal Reserve can stop raising interest rates by mid-2023 and start lowering them by early 2024.
Bitcoin will rebound to $30,000 in 2023, according to VanEck analyst Matthew Sigel, who also cautions that it may stay in the $10,000–$20,000 area in the first three months of the year.
There are many cryptocurrency news predictions today, but here's a trimmed-down version of what to expect.
Crypto news predictions 2023: Expect some changes
1. Ethereum surpasses Bitcoin in market value
In contrast, Bitcoin has always reigned supreme among cryptocurrencies. Investors have been persuaded to accept a high value per token because of the perception of scarcity caused by the 21 million token cap. However, when we look at Bitcoin's utility, it is far from ideal. According to BitInfoCharts.com's transaction data, the daily average number of Bitcoin transactions has essentially remained the same over the last seven years.
The true value of Ethereum has been demonstrated as a platform for the creation of decentralized applications (dApps), even though the Ether token can theoretically be used for payments.
In other words, it is possible to make a compelling fundamental/tangible case for why Ethereum is a more valuable cryptocurrency than Bitcoin.
2. Two most-popular meme coins will lose 50% of their value
Shiba Inu and Dogecoin were, at one point in 2021, the two most popular cryptocurrencies. Dogecoin produced a once-in-a-lifetime gain of more than 20,000% between the stroke of midnight on January 1, 2021, and its all-time high set on October 27, 2021, while Shiba Inu produced a once-in-a-lifetime gain of more than 121,000,000% between the stroke of midnight on January 1, 2021, and Elon Musk's appearance as the "Dogefather" on Saturday Night Live.
Additionally, payment coins that soar over a short period of time have suffered greatly throughout history. With the exception of Bitcoin, almost every payment coin that experienced a rapid increase of 20,000% or more experienced a subsequent 93%–99% retracement. SHIB and DOGE appear doomed to lose 50% or more of their value in 2023, with nothing to help them stand apart.
3. Expect another FTX fiasco
The FTX Token was practically worthless and useless after FTX, one of the biggest digital currency exchanges by trading volume, filed for bankruptcy protection in November. FTX went from tweeting about recently rented office space in Miami to requesting $9 billion in funding to avoid bankruptcy in under 48 hours. In the end, FTX's liquid assets weren't enough to cover its debts.
There are numerous indicators that FTX might not be a one-off occurrence. For instance, the accounting company Mazars said just two weeks ago that it would stop collaborating with cryptocurrency businesses. Binance, Crypto.com (Cronos is the native token created by Crypto.com), and KuCoin, which has the native KuCoin Token, are among its cryptocurrency clients.
It has been nearly impossible to demonstrate that the reserves for digital currency exchanges are sufficient, with the exception of Coinbase Global, which is mandated to undergo regular auditing as a publicly traded firm. That raises serious questions and gives us even more cause to suspect that FTX won't be an isolated incidence.
4. El Salvador will pull from its Bitcoin experiment, other countries might follow
To begin with, most El Salvadorians aren't interested in utilizing Bitcoin as a form of payment because many of them lack access to conventional banking institutions. In 2022, just 24.4% of El Salvadorians surveyed by the Jose Simeon Canas Central American University had used Bitcoin to make a payment. Furthermore, according to two-thirds of respondents, the Bitcoin deployment was unsuccessful.
A prospective U.S. or worldwide recession might be disastrous for Bitcoin and, as a result, for El Salvador's financial stability, which could be a threat to other nations as well. This is because digital currencies haven't been able to decouple from the stock market in recent years.
The Question: Would the people be accepting to Crypto?
To summarize: Crypto news predictions 2023 - still a hit!
Since the beginning of the cryptocurrency industry, analysts and market researchers have examined its performance and come to the conclusion that the market is growing steadily. Many believe that 2023 will be a strong year for the cryptocurrency industry as confidence in the technology grows and more companies decide to utilize it. This ongoing expansion has led to this expectation.
The demand for qualified workers in the industry will rise as more businesses use blockchain technology. This will provide employment opportunities, which might encourage future industry expansion.
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