The Can't-Miss Crypto Stories of 2023
2022 is quickly coming to an end and it was a year that most people in the cryptocurrency market would rather forget. While it may have seemed like an unbearable year to many. Due to prices constantly moving lower, and then the flow of insolvencies that would devastate the crypto market. 2022 was worse than usual, but the truth is that it wasn’t so different than what we always experience during the coldest parts of crypto winter. In the past, we have seen many insolvencies, hacks, funds being lost, and portfolios being demolished. It's the same as any other bear market, just amped up a little on steroids.
With that said, 2023 is quickly approaching, and it's vital for those of us investing in crypto to turn our attention toward it. To be successful in crypto you must always maintain a balance of learning from the past, paying close attention to what is happening today, but also always be looking ahead to the future. If you can maintain that balance, you will become very successful in crypto.
So with that in mind, let’s turn our focus ahead to next year and the storylines/events that you need to be watching out for. They could be the factors that determine if next year is a great year for crypto or another dud.
1. XRP vs. SEC
In most of my articles, you will never see me writing about XRP, as it is a cryptocurrency that I have no interest in. However, there is no denying how important the trial between XRP and the SEC is. The SEC is suing Ripple declaring that XRP is a security, and Ripple is naturally trying to defend XRP. This is a case that will have huge ramifications across the industry. If the SEC wins, it will set a precedent in the courts and they will likely begin targeting several more cryptocurrencies. Meaning that only Bitcoin and perhaps Ethereum would be safe from this scrutiny. We have seen firsthand how this can handcuff a protocol’s price discovery. As XRP never approached its previous all-time high due to this trial with the SEC taking place.
However, if Ripple and XRP were able to win this case, it would set a very bullish precedent for the crypto industry. In that scenario, it would not only help XRP and the whole market to soar in price. But it would give more insights into the crypto market regarding regulation in the USA.
2. Ethereum Shanghai Update / Being Able to Withdraw Staked ETH
During the fall of 2022, all eyes were on Ethereum to see if they would be able to pull off the merge to Proof-of-Stake successfully. It went off without a hitch. However, in the last few weeks, there have been heavy complaints and concerns about the uncertainty about being able to withdraw staked Ethereum. For those of you who don’t know, currently, once you begin staking ETH, it cannot be withdrawn until a future update is implemented into the ETH protocol. There are billions of dollars locked up in staked, and those people have begun to voice their concerns. Therefore the ETH foundation has made implementing staked ETH withdrawals its priority for its next big upgrade, Shanghai.
Some people might believe that withdrawals opening up could cause sell pressure from many people finally being able to sell their ETH. But the truth is that withdrawals will be tiered, which will prevent that from happening. In fact, it will likely have the opposite effect. Staked ETH withdrawals finally being implemented will give people much more confidence in Ethereum and they will be much more willing to stake. Which will result in less circulating ETH and could cause prices to increase.
3. Further Insolvency Contagion and Fallout
The insolvency of FTX was something that none of us saw coming and it is likely that we haven’t seen the full contagion effect from it yet. BlockFi was the first to declare bankruptcy due to FTX, and Genesis could soon follow if they aren’t bailed out. Other companies are likely struggling to maintain solvency that we aren’t aware of yet. If that happens, we can expect more pain for prices in crypto.
However, if we have already come to an end of the insolvencies in the crypto market. That would mean we have likely already reached our price bottom during this crypto cycle. Prices may go sideways for quite some time, but the worst of it would be finished.
4. Will NFTs be able to hold onto Value/Recover
It seemed like I was one of the few people in the crypto industry who never got into NFTs. I understood their value and thought there were many great use cases for them in the future. But wasn’t a fan of the current iteration of NFTs and thought they were incredibly overpriced. Do you remember pictures of simple rocks being sold for hundreds of thousands of dollars? But actually, the main thing that had me worried about NFTs was their illiquidity compared to regular cryptocurrency.
I was always worried that once the market turned, the market for NFTs would dry up. Resulting in me being unable to sell my NFTs even if I wanted to. I do believe that the largest projects such as Crypto Punks and BAYC will always be popular due to their brand name. But 99.9% of the rest of NFTs will become worthless resulting in many bag holders. It will be interesting to see if NFTs will be able to recover and remain popular going into the future.
5. What will the FED do? Becoming more dovish on interest rates = prices going up
Simply put, the FED raising interest rates very aggressively in 2022 caused all financial markets including crypto to drop significantly. But they can’t keep that pace forever, and will likely pivot. In fact, the head of the FED has already hinted that they will begin being more dovish regarding interest rate hikes.
Once this happens, the market will turn risk-on and cryptocurrency prices will skyrocket. This potentially could be the most significant factor in how crypto prices perform in 2023.
6. Will Solana Be Able to Recover and Repair its Tarnished Image?
In 2021, Solana was the talk of the market. Its high-performance technology and its quick rise up in price led many to wonder if Solana would dethrone Ethereum. It had an extremely strong backer and ally in FTX/Alameda. Backing that immediately gave Solana and its ecosystem a huge boost in confidence.
But as we all know now, FTX/Alameda would become insolvent and have or will be forced to sell their Solana to pay off creditors. Estimated to be 10% of all of Solana. What once gave Solana an advantage over other Layer 1 blockchains, has become its biggest obstacle and weakness. Now that it is on even ground with other Layer 1’s and maybe even behind them, it will be interesting if Solana will be able to recover from this.
7. Bitcoin- Quiet Times Equals Recovery
Bitcoin’s price is currently sitting right under $17k and people feel like it's the end of the world. On the other hand, I think it is amazing how resilient Bitcoin has been and is still managing to hang onto this price level. Throughout this difficult year even with prices falling, Bitcoin has continued to become even stronger. With the network mining hash rate breaking new all-time high levels, even though profitability has dropped significantly due to lower prices. Bitcoin is surviving and everything is lining up for a rebound year in 2023. The FED will be less aggressive, the insolvency contagion will come to an end, the world is getting over the pandemic, and the next Bitcoin halving is quickly approaching.
Even with everything that happened in 2021. When there were quiet times of peace in the market, Bitcoin would often begin recovering, only to be dropped back down due to a new black swan event occurring. If the market can just remain quiet, Bitcoin will see a large recovery.
8. Internet Computer — Something is brewing.
In the last few months, ICP has had the most active development/developers on their blockchain. Something is happening. While it takes quite a while to see any fruition from development. We will likely start the see the results of this in 2023. Similar to Solana, ICP is a project that is needing to repair its image.
However, in recent months we have become aware of how Alameda/FTX tried to sabotage the ICP launch before it could become a juggernaut to take out Solana. While there are weaknesses to ICP, going by the tech alone no other cryptocurrency is even close. Which may be while developers have been recently flocking to ICP. I believe that ICP will see a similar run in 2023 to what Solana saw in 2021 when its price went from $2.50 all the way to $250.
These storylines are only a small taste of the key things we need to be watching for in crypto in 2023. While no one knows how the year will turn out. One thing is for certain, it will be an exciting year for crypto and I can’t wait to see what happens!
How about you? What do you think are the most important things for crypto in 2023 that we need to watch out for?
As always, thank you for reading!