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Cryptocurrencies have experienced a flourishing year in 2023, despite being marred by fraud and scandals. The primary cryptocurrency, Bitcoin, witnessed a staggering annual increase of 160%. Despite the negative reputation associated with scandals, bankruptcies, fraud, and regulatory issues, the cryptocurrency industry has made significant strides.
Bitcoin, often referred to as the “gold” of cryptocurrencies, has emerged as the top cryptocurrency with a year-to-date gain of 160%. Additionally, the industry celebrated two high-profile court victories, indicating a growing resilience within the sector. Furthermore, there is anticipation that a traditional investment product will finally receive approval in January, potentially attracting a wave of new investors.
The overall macroeconomic landscape has contributed to the success of digital assets and the global financial markets. Factors such as inflation easing, economic growth, and the possibility of the Federal Reserve halting interest rate hikes have bolstered the cryptocurrency industry. Crypto specialist and partner at global consulting firm StoneTurn noted that 2023 was the year of crypto resilience.
Despite the lack of explicit rules and regulations, US authorities, particularly the Department of Justice (DOJ), have continued to exert their influence on the cryptocurrency market. This persistence in regulation showcases the determination to prevent fraudulent activities in the industry. As one expert explains, fraud will always exist due to the unstoppable nature of human behavior, and rule-breakers will find a way in.
One prominent figure in the cryptocurrency industry in 2023 was Bankman-Fried, a once-heralded billionaire. However, he was convicted in November for running a multibillion-dollar scam through his FTX trading platform over several years. The trial of SBF, as he is known, became the most publicized event of the year, garnering attention from both cryptocurrency supporters and detractors. The trial revealed the short-lived scam that supported FTX, attracting numerous conventional investors.
Crypto skeptics now consider the rise and fall of SBF as compelling evidence against the legitimacy of cryptocurrencies. However, supporters of the industry celebrated SBF’s conviction as the removal of a rotten apple. A few weeks after this landmark decision, US officials achieved another win in law enforcement by securing a $4 billion settlement from Changpeng Zhao, also known as CZ, for money laundering allegations. Binance, the cryptocurrency trading platform CZ was associated with, is one of the most popular platforms globally.
Faryar Shirzad, the chief policy officer of Coinbase, summed up 2023 as a good year for builders and a bad one for scammers. Investors reacted positively to these law enforcement victories, resulting in a 23% surge in bitcoin’s price, reaching $44,000, its highest level in 18 months.
The anticipation of a spot bitcoin exchange-traded fund (ETF) approval in the US market became an important focal point for the cryptocurrency industry in 2024. This development would allow investors to track the price of bitcoin through an ETF without directly holding the cryptocurrency. Mainstream investors find this approach appealing, as it provides a low-risk entry point and allows them to leverage their existing brokerage accounts.
With the prospect of regulatory control, the spot ETF approval adds further reassurance to investors. Moreover, the halving of bitcoin, where the supply of tokens is cut in half every four years, has fueled optimism. Antoni Trenchev, co-founder of crypto lender Nexo, believes that the halving event in 2024 will be a significant event for Bitcoin enthusiasts, potentially driving the price of bitcoin to over $100,000. This optimistic outlook is supported by the anticipated double boost from the spot ETF approval and the halving taking place in the spring.
Despite these positive predictions, experts caution that the road to $100,000 will not be without challenges. Just like Bitcoin’s volatile history, unexpected setbacks and significant price drops may occur along the way, as noted by Anthony Scaramucci, founder of SkyBridge Capital, who predicts that Bitcoin will reach $140,000 by the end of the year.
In conclusion, 2023 proved to be a year of resilience and progress for cryptocurrencies, despite the presence of fraud and scandals. Bitcoin emerged as the leading cryptocurrency with a remarkable annual increase. High-profile court victories and anticipated regulatory approval of a spot bitcoin ETF added to the industry’s positive momentum. The prospect of the halving event in 2024 further fueled optimism, although experts emphasize the potential challenges and volatility that may lie ahead.
