Crypto results for 2023

Crypto spring

The main news is the confirmed end of the "cryptozyme". As a trendsetter of the market, Bitcoin has been growing quite steadily for 12 months now, with over 170% growth in its price over the past year. Moreover, bitcoin is already closer to its absolute maximum of November 2022 than last year's local minimum.

The resurgence of cryptocurrencies following a prolonged bear trend that lasted for most of 2022 is prompting speculation of a new bitcoin rally and is once again attracting investor attention.

Regulation

Contrary to the positive expectations from the growth of quotes, the entire last year was associated with scandals and investigations of various agencies against representatives of the cryptocurrency industry. Almost all major crypto exchanges faced lawsuits and fines from American regulators.

And although it all started a long time ago, it was in 2023 that regulators began to tighten their requirements for the crypto industry.

For example, in February, the New York Department of Financial Services ordered the exchange to stop issuing BUSD (Binance's stablecoin). By the end of the year, the exchange was forced to completely withdraw support for its stablecoin. Then, several more claims were made against the exchange, including a March lawsuit from the U.S. Commodity Futures Trading Commission. In the fall, Wall Street Journal journalists became aware of suspicions against Binance regarding assistance circumventing U.S. and E.U. sanctions.

The result of all these proceedings was a record for the industry fine of $4.3 billion and the removal of the founder of the exchange, Changpeng Zhao, from the post of CEO.

The second largest crypto exchange, Coinbase, is also under investigation, and regulators have brought several charges against it.

And while they continue to battle, smaller exchanges are agreeing to fines. Crypto exchange KuCoin, for example, agreed to pay $22 million as part of a lawsuit settlement at the end of the year. And that's just one of dozens of cases.

The new life of the NFT

Perhaps the most high-profile event of the year for the crypto industry was the emergence of the Ordinals project in January. Thanks to the skilful integration of several technical innovations of Bitcoin, the developers managed to record any information in any volume into the blockchain. Now, it is possible to create NFTs and interchangeable tokens similar to ERC-20 from the Ethereum network in the first crypto coin network, even without smart contracts.

In a way, NFTs inside the Bitcoin blockchain look more canonical because all information, including media files, is stored directly in the blockchain in unaltered form, not just basic information with links to third-party storage, as implemented in other ecosystems.

Development of crypto projects in Telegram

At the beginning of the year, the TON team implemented support for USDT stablecoin in their built-in crypto wallet, allowing them to expand their service scope. And by the end of the year, they announced plans to create a full-fledged payment instrument for cryptocurrencies.

Due to Binance's problems, part of the audience began to move to the p2p service from the Telegram crypto wallet, which further increased the platform's attractiveness among the cryptocurrency community.

All this is also positive for the market's long-term prospects, as the potential audience of cryptocurrency users is increasing manifold.

Cryptocurrencies ≠ securities

Despite the toughening rhetoric from U.S. regulators, cryptocurrency companies' court victories happened in 2023. However, it's hard to call Ripple's victory complete, as they will have to pay fines for most of the charges. But from the preliminary conclusion of the judge, it follows that cryptocurrency is not a security by default but can be recognized as such only in a particular context.

Even though we can expect some problems in the future for crypto projects with the Proof-of-Stake mechanism and crypto exchanges that will support the trading of these tokens, The decision itself is a severe precedent where a token was not recognized as a security outside of a particular context, which may even safeguard a large part of the market from future proceedings.

What are your plans for 2024?

With bullish sentiment returning to the market, some significant altcoins remain undervalued. And their current market capitalization allows us to assume that they could perform outstandingly after the summer of 2024. These tokens could be, for example:

• Litecoin,
• Uniswap,
• TRON,
• Polygon and some others.

Investors' expectations of the approval of spot cryptocurrency ETFs in the U.S. market and future shortages due to Bitcoin halving are encouraging. Along with this, global economic indicators are beginning to normalize, which will also affect the supply and demand balance in the future, bringing new capital to the market.

Although some experts express their concerns in the context of the principle "buy on rumours, sell on facts".

Thus, analysts at J.P. Morgan believe that "excessive optimism of crypto investors, caused by the SEC's upcoming approval of the bitcoin ETF, has moved bitcoin to the overbought levels seen in 2021". And that after the fait accompli of the approval, the market will, on the contrary, react with more vital selling.

Either way, the current market conditions are encouraging for the long-term future of the cryptocurrency industry. Even though possible shocks are ahead, the current long-term trend remains upward.

However, despite all the optimism, carefully evaluate your opportunities with an eye on your planning horizon and do not make hasty decisions.