TL;DR
- The crypto’s 14th year was marked with fraud, scandal, bankruptcy, and regulatory squabbling. It made the market seem to take a long winter nap in the year’s first half.
- Despite the damaging events that grip the crypto space in 2023, the market is ready for a significant transformation that signals a promising bull run.
A Whirlwind Year of Digital Currency Surprises
As cryptocurrency’s 14th year is ending, it has been marked by scandal, fraud, regulatory squabbling, and bankruptcy.
2023 may go in the books as the most brutal year in the industry. However, it is still one of the best years for the crypto sector.
As macro-conditions rally and Bitcoin (BTC) bounces back, many cryptocurrency investors anticipate the next bull to be similar to the 2013 BTC market.
Let’s recap 2023 as investors anticipate a glamorous 2024.
What Crypto Chronicles Defined the Legacy of 2023?
Crypto’s 14th year was ruthless, with many malefactors relating to the 2021 boom meeting justice. The US authorities flexed their muscles on crypto.
Changpeng Zhao (CZ), Sam Bankman-Fried, and other less prominent individuals created bad press for the sector.
Far from that, the early teen crypto sector was making notable wins, like Bitcoin surging to 160%. In addition, industry players had major legal wins—courts ruled in favor of high-profile court cases (Coinbase and XRP).
There was also grave anticipation for the long-awaited Bitcoin ETF approval in January 2024, which may bring in new investors. It was a year of resiliency as digital assets benefited from a growing economy and cooling inflation,
Initially, 2023 started enthusiastically, with a market capitalization of $1.2 trillion gain. This gain reversed the damage from the bear market experienced due to the FTX collapse.
In Q2, the market was taking a breather to consolidate these gains. The market saw a 30% surge in Ethereum staking while facing other news regarding securities.
Moreover, the SEC approved Grayscale’s Bitcoin spot ETF, sparking a positive run in Q4. The positive sentiments pushed the market capitalization to $1.65 trillion.
What will 2023 be remembered for? Here are some of the unforgettable events in the crypto realm throughout the year.
Bitcoin’s Annual Low of $16,680
The value of Bitcoin (BTC) has a downward trend from its all-time high of $69,000 in Nov. 2021 to an all-time low of $16,800 in 2023.
It resulted from all the bad press in 2022, which made the market bear for a while. A good example was the FTX collapse that decreased Bitcoin’s value.
Bitcoin later created a bullish candlestick, increasing its value to $42,668.
Ripple’s Partial Victory Against the SEC
Ripple Labs Inc. gained a partial victory against the Securities and Exchange Commission (SEC) last July 2023. It followed a ground-breaking ruling that stated the firm never violated the federal securities law. Judge Analisa Torres’s ruling increased the XRP price by up to 75%.
The ruling was considered a major win for the crypto industry. Many believed the ruling galvanized other crypto firms to battle out the SEC amid ongoing regulatory confusion. Later, the regulatory commission dropped its case against Ripple CEO Bard Garlinghouse.
And also the executive chairman, Christian Larsen. This news made it a third consecutive win for Ripple in the long-drawn legal tussle with the SEC. The US SEC filed a lawsuit against Ripple in 2020, accusing Ripple CEO of selling $1.3 billion in unregistered securities.
The commission also suggested that the pair were effecting more than $600 million in illegal securities sales.
Blockchains Frenzy
After the success of Arbitrum and Optimism, the crypto space shifted its focus to creating new Layer 2 blockchains. 2023 witnessed the launch of several successful and unsuccessful blockchains. Others are still in the works and may launch next year.
Once Ethereum transitioned into Proof of Stake, Layer 2 solutions became more relevant. Developers were shifting their focus to building the networks that will act as the foundation of the next bull run.
Currently, the Layer 2 ecosystem is dominated by zero-knowledge proof and optimistic rollups. Many changes will come up in the coming year. As for Layer 1 blockchains, Solana became the number one leader of the year.
The network had significant growth driven by popular airdrops and trendy memecoins. In any case, the competition for users is still on. And non-EVM chains will be the first to be affected.
Despite market growth and increased on-chain activities, several users still need to grow. New users need clarification about entering the crypto space.
Bitcoin Spot ETF Greenlight
Bitcoin reached an 18-month high of about $37,970 in October. This was after rumors of BlackRock’s interest in Ether Exchange-Traded Fund (ETF). Simultaneously, another court reverses the SEC’s decision against Grayscale’s ETF application. This led to an impending institutional influx into the crypto space.
Among 14 other investors, including Grayscale and Valkyrie, BlackRock awaits the SEC’s approval of their applications. Investors believe the SEC may approve various Bitcoin ETF applications in January 2024. It’ll allow US investors to buy Bitcoin futures ETFs with futures contracts. And they may sell later on at an agreed-upon price.
Many are waiting in anticipation of SEC approval. It would allow investors to invest in BTC directly, making it accessible to many people.
SBF’s High-Profile Legal Show-Down
The month-long Sam Bankman-Fried (SBF) case trial turned in a guilty verdict. The prosecutors accused the founder of the crypto-exchange FTX of stealing from its customers.
The news raised concern for investors in fear of trusting the industry. Despite all the accusations, the defendant maintained he was innocent throughout the trial.
In unexpected news, he was found guilty. The verdict means he may face up to 110 years in jail. Bankman-Fried sentencing is expected in March 2024.
PayPal Launched Its Stablecoin
In an unexpected turn of events, PayPal, the leading online money transmitter, entered the fray. It created its US-dollar-denominated stablecoin PYUSD. The innovation marked a significant milestone towards incorporating cryptocurrencies into everyday payment systems.
Airdrops Became Great
The most enduring trend of 2023 was the airdrop craze. Despite the airdrop concept being there for a while, it became more mainstream in 2023. It enabled crypto enthusiasts to hunt for early-stage projects to receive free tokens.
The trend signals its sustainability and is expected to continue in the coming years. It all started with the Blur airdrop for traders on the NFT marketplace. However, it gained real momentum with the Arbitrum airdrop.
Nearly $2 billion was distributed to thousands of users, making it the largest airdrop of the year.
Bitcoin Ascends to $44K
Bitcoin scaled to new peaks for the first time since April 2022, crossing the $44,000 mark in December. The news brought the cryptocurrency sphere to a standstill. Many believe it was a superb achievement, given that BTC opened the year at less than $17,000.
The high price surge happened when respectable Wall Street firms were waiting for the SEC’s approval for their Bitcoin ETF applications. Crypto experts believe that the SEC will approve several applications.
This will allow traditional investors to invest in crypto in a regulated and safe environment.
SEC’s Clash with Binance and CZ
Binance co-founder and former CEO Changpeng Zhao stepped down after he pleaded guilty to 13 counts facing him. He agreed to pay a $50 million fine and resign from his leadership role at Binance.
According to the SEC charges, Binance and CZ broke the Bank of Secrecy Act. Binance and CZ agreed to a $4.3 billion settlement with the Department of Justice (DOJ).
Previously, the SEC filed a lawsuit against the pair in June 2023. It accused Binance and its founder of commingling billions of dollars of customers’ funds. And transferring them to a Euro-based company that was associated with CZ.
According to the regulatory commission, CZ and the world’s largest crypto exchange by trade volume subverted their controls. They allowed high-net-worth crypto investors to trade in unregulated overseas exchanges.
Moreover, they also used Binance.US as a protective shield for CZ and Binance to escape law enforcement and protect them.
Resurgence Interest in NFTs in the Crypto Sphere
There’s every sign of NFTs coming back as 2023 comes to an end. Regardless of what appears as prices plummeting, major brands see renewed interest in their products.
Pudgy Penguins announces its selling its products to online retailers and brick-and-mortar shops. In addition, established firms are moving back to the NFT space. Many brand building is, therefore, expected to become a major driver of Web3 adoption in 2024.
Mainstream media is still skeptical about Non-Fungible Tokens due to low performance and poor demand. Stores like Walmart are embracing them and are contemplating selling them alongside tangible products. This may build stronger NFT brands.
The next wave of viral NFT products will differ from the previous successful ones. The majority of them will focus on value creation rather than speculation. It would also focus on large quantities sold to a broader market at lower prices.
Various companies, including Starbucks, Reddit, and Mike, are experimenting with the mass-market NFTs.
Crypto Market in a Nutshell in 2023
Looking at 2023, we see the crypto market experiencing unmatched growth. Every indication signals an inevitable bull run going into 2024. Therefore, every crypto enthusiast must seek out knowledge and sight that would make them make informed decisions.
If everything on the market remains constant, we should expect a fresh liquidity boost from institutional investors. Many banks and other large entities’ investors may allocate portions of their assets to cryptocurrency.
Just like it was in 2017 and 2021, new crypto projects will emerge in 2024. These projects will likely become foundational for a surge of users in 2024 and 2025. The main driver, however, will be the adoption of Web3 by huge web projects.
The lessons learned will shape the industry’s trajectory as we bid goodbye to this transformative year. It would set the stage for an intriguing and promising journey in the crypto space.
Shawn Munir
Shawn Munir is the CEO of Coinweb.com and spearheads all the collaborative partnerships for the platform. He bought his first Bitcoin in 2017 and never looked back. He is also an investor in 200+ Web3 startups and is considered an expert in the field. Before building Coinweb with his co-founders, he co-founded Presail, a management platform designed for companies and investors to manage their investments in Web 3. In addition to his entrepreneurial endeavors, Shawn serves on the United Nations...
