We all can feel it. This year has been a wild one for the crypto market. Several incidents, such as the zeroing of major altcoins and the bankruptcy of crypto exchanges, have occurred. These events have made people wonder what the future holds for the crypto market in 2023 and whether it will be bullish or bearish. As it is impossible to predict the future, instead let’s look at some of the possible trends for the new year.
Finally, a recovery
There is a belief that the crypto market will start to recover in 2023. While a full-fledged bull market may not return, it is believed that the worst of the bear market will be over by the end of the year.
Many predict a bottom in the first quarter of 2023, with bitcoin possibly hitting a low of $10,000 or less. As a result, most altcoins could drop by an additional 60-80%. it can bring cardano down to about 10 cents, which could be a buying opportunity for some or signal the end of its reputation as a “Ethereum killer.”
keep an eye on the first quarter
The Federal Reserve is expected to stop raising interest rates in the first quarter of next year. This could help prevent the crypto bear market from crashing further. BTC could bottom around $10,000 or a little lower. This is because the stock market, which is highly correlated with the crypto market, has not yet found its bottom and is expected to drop by an additional 20-30%.
However, BTC could still experience a flash crash below $10,000. This could be due to various factors such as a ban on bitcoin mining due to energy shortages, Mt Gox creditors selling their bitcoins, and low liquidity and liquidations. To protect your crypto assets, it is important to keep them on your personal crypto wallet instead of centralized exchanges.
The phrase “not your keys, not your coins” is becoming increasingly relevant in the current market.
The SEC could crack down on another major crypto project, company or exchange in 2023. This is due to the negative events of the current year and the ongoing impact of the collapse of FTX. solana Seems to be in trouble as its price has dropped and projects are moving to other chains like Polygon.
Gensler Is Coming to Crypto
In any case, as long as Gary Gensler remains chairman of the SEC, another crackdown is highly likely. Gensler’s term doesn’t expire until 2026, so there’s plenty of time for him to do damage. Granted, he won’t be expelled from the SEC for his close encounters with Sam Bankman-Fried, but that’s a topic for another day.
This means that every cryptocurrency apart from BTC is a potential target. This is because almost every single crypto exchange and platform offers cryptocurrencies other than bitcoin, making them potential targets as well. The first quarter crackdown could be a catalyst for new crypto lows.
regulations are needed
Next up for 2023 is that there will be a lot of crypto regulations. Now, most of these rules will probably be very good, but some will probably be very bad. Furthermore, it is very likely that crypto regulations will vary from region to region, despite efforts to create a global crypto rule. Still, the FTX collapse may eventually be enough to encourage much needed regulation.
some good, some bad—and that’s okay
Lack of regulatory clarity is the primary reason why institutions are hesitating to invest in crypto, especially altcoins. So the establishment of regulations in the US, EU and elsewhere could result in a lot of inflows and contribute to a Q1 recovery for crypto.
More importantly, crypto regulations will effectively force crypto projects to be decentralized. This is because the only way to avoid many of these regulations would be to be decentralized from top to bottom—which is what crypto was supposed to be about in the first place.
While most would agree that regulation would generally be good, some of these crypto regulations have the potential to be very bad. The worst are likely to be the rules regarding things like payment, DeFi and privacy, possibly even self-preservation. The takeaway is that bad crypto regulations can slow down adoption. DeFi However, so far, it seems that DeFi has been left out of most crypto regulations, as long as the protocols are truly decentralized.
Because all these protocols are a threat to the traditional financial system. The silver lining in all of this is that the crypto industry has the potential to grow significantly due to Good rules and maybe the bad won’t be as bad as we imagine.
With any luck, this increase in adoption and capital will make it possible for the crypto industry to lobby for the removal of bad regulations. Consider that powerful individuals and institutions want privacy the most.
DeFi will go mainstream
This will be due to a combination of improved front ends, regulatory clarity, increased liquidity, and proof of resilience from some DeFi protocols, which will increase overall trust in DeFi and lead to a decline in the trust of centralized entities in the crypto industry. In short, people have seen the writing on the wall as Earth luna and FTX.
Crypto adoption will increase
The number of crypto holders will increase significantly in 2023. For context, crypto adoption currently stands at around 4% of the global population. It’s not a lot, but the growth has been exponential and there are many reasons to expect this trend to continue next year. For starters, a lot of platforms are integrating crypto features.
Most notable are Facebook and Instagram, which are testing NFTs on several smart contract cryptocurrencies. Even Starbucks is working on an NFT loyalty program.
Not only this, but free speech focused social media platforms like Telegram and Signal are integrating crypto features into their platforms ton, And Elon Musk has made it clear that Twitter will be showcasing crypto integration as well. All these companies combined have billions of users. Even a small percentage of crypto adoption by their users will be significant.
So there you have it. Not a prediction but instead some trends to keep an eye on for 2023.
SEC Chairman Gensler: crypto companies – you have been warned
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