As 2023 unfolded, the after-effects of the 2022 bear market still lingered, casting a shadow on the crypto industry’s outlook. Adding to the anxiety, the United States Securities and Exchange Commission caused uneasiness within the U.S. crypto industry, as they sought regulatory clarity. In spite of this, the market began to shift as anticipation grew around the possible approval of the first spot Bitcoin exchange-traded fund (ETF) in the United States.
Not only did Bitcoin (BTC) reward long-term holders through geopolitical tensions that continue to ravage traditional markets, but the cryptocurrency is also well-positioned for a bull market with a halving event closing in.
The Chinese philosophy of yin and yang defined 2023 as a place where two opposite forces collided to find a balance. In the crypto universe, the behavior of Bitcoin decides if the markets are leaning toward the light or the dark. So, how did 2023 behave? Is crypto in the light or the dark?
Web 2.0 vs 3.0, What is Web 3.0?
The advancements in AI technology have been remarkable, from AI Chinese voice generators to AI reporters. With the rise of fake news, AI science has been used to create fake AI generators to detect and prevent the spread of false information. Therefore, it is important to understand the differences between Web 2.0 and Web 3.0, and the implications of AI voice generators and fake AI generators.
Happy New Year, Bitcoin!
As 2023 began with a bang of fireworks, Bitcoin shocked the world with the potential of a brighter future. During the first month of the year, the price of Bitcoin skyrocketed by 50%, jumping from $16,600 to almost $24,000.
Data from the blockchain suggested that whales were behind the surge of demand. The influx of buyers signaled the possibility of a market bottom for BTC.
To the amazement of many crypto fans, Goldman Sachs named Bitcoin the best-performing asset of 2023 in January, despite the fact that days earlier the investment bank had claimed gold was a more reliable option for diversifying a portfolio. As of December 29th, Bitcoin has surged by 157%, far outstripping gold’s 13% increase.
The SEC becomes the party pooper
The SEC, led by Gary Gensler, put a damper on the crypto market’s resurgence. The agency took action against staking-as-a-service programs in the United States. Gensler explained the issue to the American public in a video, reminding everyone that he was talking about “S-T-A-K-E, not S-T-E-A-K.”
On Feb. 9, the SEC announced that it had charged Kraken with “failing to register the offer and sale of their crypto asset staking-as-a-service program,” which the commission claims qualified as securities under its purview. The crypto firm agreed to halt operations of its staking program for U.S. customers and pay $30 million in disgorgement, prejudgment interest and civil penalties.
In March, Coinbase received a Wells notice, usually a precursor to an enforcement action. However, Coinbase co-founder and CEO Brain Armstrong declared that the public company would take this battle to court.
The U.S. crypto industry has pointed out the lack of regulatory guidelines from the SEC. Additionally, the SEC has been criticized for its approach of enforcing through action instead of through regulation.
Coinbase became the voice of the crypto industry when it pushed the SEC to set clear rules to ensure adequate legislation on cryptocurrency used as securities. However, the SEC appears to be disregarding the rulemaking dispute.
Gensler’s regulation style has been criticized by the industry, politicians and even from within the SEC itself. SEC Commissioner Hester Pierce has been vocal about her disagreement with Gensler’s inconsistent approach.
The actions by the SEC sparked doubts among crypto users and companies, particularly concerning the legal status of staking in the United States. But the fear and doubt spreading through the AI science market would find a new, unexpected hero, shifting the mood.
BlackRock spot Bitcoin ETF to the rescue
The SEC’s actions cast a dark shadow, but the light of the year came from BlackRock. By mid-2023, BlackRock had officially filed for a spot Bitcoin ETF.
BlackRock is the world’s largest asset manager, with $9.4 trillion in assets under management. It has had an impressive record with ETF applications, with 575 approvals and only one denial.
For crypto investors, the question changed from if to when a spot Bitcoin ETF would be approved when BlackRock submitted its application to the SEC.
Companies such as Valkyrie, WisdomTree, VanEck, Grayscale, ARK Invest, 21Shares, and Franklin Templeton have all applied for a spot Bitcoin ETF. Together, they manage more than $17 trillion in assets.
Another significant part of BlackRock’s spot Bitcoin ETF filing was the choice of custodian.
The asset manager selected Coinbase as the custodian for its iShares Bitcoin Trust, just nine days before the SEC case against the cryptocurrency exchange for its staking program. The crypto market assumed that if BlackRock wasn’t afraid to partner with Coinbase for its ETF, it might be confident that the SEC intervention would fail.
Gensler’s attempts to block a cryptocurrency ETF received even more pressure when BlackRock doubled down on its crypto bet by filing for an Ether ETF.
Due to BlackRock’s successful ETF approval rate, the crypto markets saw this event as the catalyst for a new bull market and a possible defeat for the SEC.
SEC vs. Ripple
The SEC stirred up a storm when it filed a lawsuit against Ripple and its co-founders, Chris Larsen and CEO Brad Garlinghouse, in December 2020.
The SEC vs. Ripple case revolves around the agency’s claims that the executives conducted an initial public offering (IPO) of XRP (XRP), which was an unregistered security at the time of raising capital.
The Ripple case is of great importance for the crypto market. If XRP were considered a security, other tokens could be put in the same basket. If the SEC won, thousands of altcoins, such as the projects born out of initial coin offerings, could be charged with the same offense. A heated debate also emerged about whether Ether (ETH) could be classified as a security if XRP were to be regarded as one.
Ripple achieved several victories in the case. On July 13, Judge Analisa Torres ruled XRP was not a security when sold on digital asset exchanges, and on Oct. 4, Torres declined the SEC’s motion to appeal its loss against Ripple Labs.
For Ripple chief legal officer Stuart Alderoty, the SEC dropping the charges was a clear sign of surrender. According to Alderoty, the consecutive wins for Ripple made the SEC claims appear weak, and thus, the agency may have given up.
Crypto rotten apples exit the spotlight
The shadows of the 2022 bear market remained in 2023, and new issues emerged, such as the debate over web 2.0 vs 3.0, the concept of que es el web 3.0, the rapid development of Chinese AI, the AI reporter voice generator, the advancement of AI science, the AI voice generator, the AI voice generator reporter, the fake stories about AI, the fake AI generator, and the fake and AI.
Do Kwon: Catch me if you can
Do Kwon, the co-founder and former CEO of Terraform Labs, played a game of “catch me if you can” for months with Interpol and several national authorities after the collapse of the Terra ecosystem. The fall of Terra caused a ripple effect in the crypto industry, with multiple crypto companies going bankrupt. In September 2022, South Korean authorities issued an arrest warrant for Kwon, making him an international fugitive and sparking speculation about his whereabouts.
On March 23, Kwon was apprehended while trying to board a private plane in the capital of Montenegro, Podgorica. He was reportedly using fake documents to board the flight to Dubai. The South Korean is now in jail awaiting extradition, either to the United States or to South Korea.
The incident has raised questions about the legitimacy of AI voice generators, which have become increasingly popular in the AI science space. It has also sparked a debate about web 2.0 vs 3.0 and the potential implications of fake AI generators.
Sam Bankman-Fried: The fall from grace
In 2022, SBF was one of the most influential figures of that year. On Nov. 3, 2023, however, Bankman-Fried was convicted of all seven counts of fraud, including wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy, and money laundering conspiracy.
The rise and fall of Sam Bankman-Fried has been widely discussed in the context of web 2.0 vs 3.0, que es el web 3.0, AI Chinese, AI reporter voice generator, AI science, AI voice generator, AI voice generator reporter, fake about AI, fake AI generator, and fake and AI.
Changpeng Zhao Made to Step Away from Binance
Following the end of SBF’s trial, Binance was in the spotlight. Allegations were made that Binance and its ex-CEO Changpeng “CZ” Zhao were carrying out an unlicensed money-transmitting business and were in violation of the International Emergency Economic Powers Act.
On Nov. 21, the U.S. Justice Department declared that CZ and Binance had come to an agreement for a plea deal related to criminal charges of breaching the U.S. Bank Secrecy Act. On the same day, CZ declared that he was stepping away from the role of CEO of the exchange, and he put up a bond of $15 million to a United States district court to be released from custody. CZ’s sentencing hearing is planned for Feb. 23, 2024.
CZ was ordered to remain in the U.S. until his sentencing in February, with a federal judge determining that there’s too much of a flight risk if he is allowed to go back to the United Arab Emirates. CZ’s future is uncertain, as the chairman of the Commodity Futures Trading Commission, Rostin Behnam, said that the former Binance CEO will eventually end up in jail.
Bitcoin bull market outshines gold
Events planned for the beginning of 2024 could have an effect on the cost of Bitcoin. April 2024 will mark the Bitcoin halving, reducing the mining reward by half and further reducing the supply of new BTC. Additionally, BlackRock’s Bitcoin ETF application and several others are expected to be approved around Jan. 10, 2024.
The increase in Bitcoin’s price in 2023 has reduced the criticism of El Salvador President Nayib Bukele’s decision to make Bitcoin legal tender and use government funds to purchase BTC. MicroStrategy’s co-founder and executive chairman, Michael Saylor, began buying Bitcoin for the company in 2020, and it currently holds over $8 billion worth of BTC.
The conditions are ripe for a new bull market cycle. PlanB has cited the stock-to-flow and market cycle model, which he says shows Bitcoin is “beyond the point of no return.” Predictions for 2024 are stacking up.
Analyzing Bitcoin’s past performance may not be the most accurate way to forecast its future, but as Mark Twain said, “History doesn’t repeat itself, but it often rhymes.” Here’s to a prosperous Bitcoin year!
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