Which cryptocurrencies have fallen the most in 2023 and what is the expectation according to experts?
After a barnstorming end to 2021, the value of cryptocurrency markets collapsed in 2022. Bitcoin went from an all-time high of $69,044.77 on 10 November 2021 before tumbling to $16,400 just one year later, a drop off of more than 76%.
After the collapse of FTX, anther large crypto trading platform, Genesis, filed for bankruptcy on Thursday.
The market as a whole went from a valuation of nearly $3 trillion to $798 billion dollars with some dubbing it the ‘crypto winter’. It would take something very special for the market to recover all of that ground in one year, especially in a much changed economic environment compared to the government pumping of stock markets during the covid-19 pandemic.
What is the expectation for the rest of the year?
There has been an inkling of a small resurgence but not enough for analysts to adjust their views on the future of Bitcoin for 2023. Eric Robertsen, global head of research at Standard Chartered Bank, said Bitcoin’s price could continue to fall to around $5,000 in 2023.
As shown with the collapse of FTX, crypto markets are struggling to hold on to any liquidity. The selling off of many coins are leading to sellers being unable to fulfil sales. With millions more Americans expected to be unemployed by the end of the year there may not be the funds to shore cryptobanks up again.
Another factor to consider is looming regulation of cryptocurrency markets. Governments have made it clear that there will be greater protection for consumers in future. The International Monetary Fund (IMF), which could never be described as a lover of regulation, has put out reports and press releases stressing the needs for nations to regulate crypto more before they become an integral part of the world economy.
“We have very strong investor and consumer protection laws for most of our financial products and markets that are designed to address these risks,” said US Treasury Secretary Janet Yellen in a statement following FTX’s collapse, while calling for “more effective oversight of cryptocurrency markets.”
The European Union is also considering crypto-related laws with Markets in Crypto-Assets (MiCA) Regulation. Expected to enter force this year, the bill seeks to establish the same rules for EU nations with regards to crypto regulation.
It certainly isn’t looking very promising for cryptocurrency in 2023.
