The cast of the movie "Crypto 2023" features characters whose names are now synonymous with fraud: Sam Bankman-Fried, Changpeng Zhao, Alex Mashinsky… Despite these “stains”, the young industry also recorded some victories this year, such as Bitcoin - the flagship of cryptocurrencies - which increased in price by 160% during the year.
Like the rest of the financial world, digital assets are getting a boost from an improving macroeconomic picture amid cooling inflation, a growing economy and the expected end of Fed rate hikes.
“It was the year of crypto's recovery,” Kyla Curley, a digital expert and partner at global consulting firm StoneTurn, told CNN.
The arrests
No 2023 crypto event is bigger than Sam Bankman-Fried (SBF), the entrepreneur once hailed as a visionary, who was convicted in November of orchestrating a multi-year, multibillion-dollar fraud through his FTX trading platform.
The SBF trial was the most spectacular spectacle of the year for both critics and supporters of cryptocurrencies, who saw the court ruling as a purge of bad actors in the industry.
In a trial that began on October 3, a jury found SBF guilty on all seven counts in the indictment, including fraud, conspiracy to commit fraud, lender fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering. SBF faces up to 115 years in prison and is being held in a New York prison.
A few weeks later, the US government scored another blow. Changpeng Zhao, better known as CZ, founder of the most popular cryptocurrency exchange, Binance, pleaded guilty to money laundering and resigned as CEO of Binance as part of a $4 billion settlement on November 22. CZ is scheduled to be sentenced in February 2024 and could face up to 18 months in prison.
According to Faryar Shirzad, Coinbase’s head of policy, the crypto world is entering 2024 with many of the worst companies out of the market, which is a positive sign. In the two weeks following CZ’s guilty plea, Bitcoin increased by 23% to $44,000 – an 18-month high, as investors expected more positive news in the coming period.
Bitcoin Prepares for Bull Market
The key event for cryptocurrencies in 2024 could come as early as January, when US regulators are expected to give the green light to Bitcoin ETFs in this market.
A Bitcoin ETF is a publicly traded fund that invests primarily in Bitcoin, allowing investors to buy and sell shares in the fund like regular stocks. This appeals to mainstream investors for a few reasons.
First, it offers everyday investors — who are wary of cryptocurrencies — a relatively safe way to get into the notoriously volatile market.
ETFs also trade on traditional stock exchanges, meaning investors can access them through a broker rather than opening a new account. The prospect of regulatory oversight also adds another layer of protection and transparency.
The end result could be a lot of new money flowing into Bitcoin in the coming period.
Additionally, the next “Bitcoin halving” event is set to take place in 2024, which is likely to push Bitcoin higher. Bitcoin is essentially a finite asset, and every four years, the algorithm halves (halves) the number of new tokens that can enter circulation.
According to Antoni Trenchev, co-founder of crypto lending company Nexo, Bitcoin's peak could come in 2025 and 2024 serves as a pivotal year to get involved.
The dual events of Bitcoin ETF approval and Bitcoin halving are expected to push Bitcoin to $100,000, up 45% from its all-time high of $69,000 in November 2021. However, Trenchev believes that the road to $100,000 will be bumpy and shaky.
Anthony Scaramucci, founder of SkyBridge Capital, is even more optimistic, predicting that Bitcoin will end 2024 at $140,000.
(According to CNN)
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