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Five Bold Predictions for Crypto in 2023

2022 was an unpredictable year for crypto, at least if you expected it to be as bullish as 2021. Indeed, it was more or less the opposite of its predecessor, a big comedown after months of unchecked exuberance and optimism, leaving more than a few investors out of pocket amid all the collapses and bankruptcies. In contrast to the gains of 2021, it saw the cryptocurrency market as a whole decline by around 64%, as the war in Ukraine and ongoing macroeconomic pressures severely dampened investor sentiment.

But with a new year comes new hope, and there are a variety of reasons to expect that crypto turns a corner in 2023. From the conclusion of Ripple’s long-running case with the SEC to Twitter’s flirtations with cryptocurrency integration, it’s likely that the market will receive at least one or two shots in the arm as it exits its current bear market. Of course, in such an uncertain world nothing can be taken for granted, but there’s little doubt that the market has been down for long enough.

Where is crypto going?

Ripple Wins Its Case Against the SEC

Back in December 2020, the SEC charged Ripple and two of its executives for selling what it alleged was and is an unregistered security, XRP. Ever since, the two parties have been embroiled in a legal battle, which expert observers suggest should end by March of this year.

Ripple Tweet

Source: Twitter

When it ends, there’s a good chance that Ripple could secure a favorable judgment, one that rejects the SEC’s charge that XRP is an unregistered security, thus enabling crypto-exchanges within the SEC’s jurisdiction (e.g. American exchanges) to relist the altcoin.

In support of this optimism, it’s worth highlighting a number of minor victories Ripple has secured en route to the case’s likely end by March.

For instance, October 2021 saw Judge Sarah Netburn challenging the SEC to prove that Ripple explicitly created an expectation of profit (from holding XRP). Then in January 2022, the very same judge also upheld Ripple’s motion to view emails and documents related to an important 2018 speech by William Hinman, in which the then-SEC chairman declared that Ethereum (as well as Bitcoin) wasn’t a security. This speech and its related documents likely have a significant bearing on how the securities regulator viewed XRP at the time.

Along with other positive judgments, this suggests that Ripple has more than a fair chance of prevailing, something that would boost not only XRP but the wider market. On the other hand, it needs to be remembered that LBRY lost a similar case against the SEC in November, raising the possibility that Ripple could also lose.

Twitter Integrates Cryptocurrency — and Dogecoin — Payments

One of 2022’s biggest events was Elon Musk’s completion of his $44 billion Twitter takeover bid. Given his long-standing championing of Bitcoin and Dogecoin, this was understandably regarded as a highly bullish development for crypto.

Well, there’s no doubt that Twitter is working on some kind of cryptocurrency integration, seeing as how the social media company has a dedicated cryptocurrency unit that has been working on NFTs and tipping for several months now. Interestingly, Binance was a co-investor in Musk’s takeover bid, with the world’s biggest exchange helping Twitter in developing strategies related to how it could work with crypto.

Twitter coin

Source: Twitter

As such, there’s little doubt that Twitter will do more with crypto at some point, with major tokens such as bitcoin, ethereum and dogecoin likely to be the main beneficiaries. However, recent weeks have brought speculation — based on code leaks — that the social network may be working on its very own coin, which may or may not remove the need to integrate existing cryptocurrencies.

Bitcoin Dominance Increases

It’s likely that the ongoing bear market will continue well into 2023. That’s largely because the Ukraine war still shows no obvious sign of ending in the near future, something which prevents the global economy from recovering fully.

Because of this, it’s likely that bitcoin’s dominance — its share — of the cryptocurrency market (i.e. its market cap as a percentage of the market’s total cap) will increase over the following months. In fact, it has already been increasing in the past couple of months, rising from 37.6% in early September to 40% as of writing.

Bitcoin tweet

Source: Twitter

This is because, in a period of instability, investors tend to gravitate towards the ‘safest’ option, and in crypto that option is invariably bitcoin, the oldest cryptocurrency with the most secure network. This also means that, when the market becomes more bullish, bitcoin will almost certainly lead the charge, as it has done with all previous bull markets.

Solana ‘Dies’, Undermining Other Layer-Ones and Boosting Ethereum

Aside from depressing the market in general, the FTX collapse also had the noticeable effect of severely weakening Solana, and possibly fatally.

At the start of November, SOL’s price was $38, yet FTX’s demise caused it to fall to just under $13 in a matter of days, and it actually fell under $9 at the end of December. This is largely because FTX and its CEO Sam Bankman-Fried had been a big supporter of Solana and its ecosystem, with the Solana Foundation itself having around $200 million in cryptocurrencies on the exchange when it collapsed.

In fact, Solana’s DeFi ecosystem has basically died compared to its previous levels, with only $211 million in total value locked in (compared to $10 billion at the start of November). Combined with a number of high-profile outages in recent months, only a very ‘brave’ investor would stake bets on Solana as an Ethereum rival.

As it happens, Solana’s demise likely undermines the case for other similar ‘Ethereum killers,’ such as Avalance, Polkadot and Cardano. And with Ethereum completing its historic Merge last year, it’s on course to go from strength to strength.

The United States Introduces Comprehensive Cryptocurrency Legislation

2023 is likely to be the year that, after plenty of to-ing and fro-ing, the United States finally passes a comprehensive legislative package for the cryptocurrency market and industry. This is supported by the number of such bills presented to Congress last year, including the Lummis-Gillibrand Responsible Financial Innovation Act and the Stabenow-Boozman Digital Commodities Consumer Protection Act.

The latter act would classify the vast majority of cryptocurrencies as commodities under US law, saving them from the clutches of the (often overzealous) SEC. This would be a major gain for the cryptocurrency sector, and combined with regulatory moves in the EU and the UK, it seems that 2023 will provide the certainty and clarity that the market needs to move forward into another bullish, expansionary phase.

As always the crypto market is unpredictable and this article just represents some of our best guesses as to where things might go in 2023.

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CryptoVantage Author Simon Chandler

About the Author

Simon Chandler

Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others. His Twitter handle is @_simonchandler_

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