Crypto Market Trends and Forecasts for The Fall of 2023

Researchers and analysts predict all possibilities in the crypto market to forecast the future of the industry. However, given the volatility of Bitcoin and the fluctuations in the market, it’s obvious that no one can give an accurate prediction regarding how the cryptocurrency will perform in the future. A common question that every crypto investor asks is will Bitcoin plummet or soar? Which cryptocurrency should you invest in? And how much investment in this volatile market is worth it? There are countless predictions. Knowing the latest crypto market trends and forecasts  for the year 2023 will help you prepare ahead for the industry and adjust your investment strategy accordingly.

Cryptocurrency showed great results in the year 2021. Bitcoin, one of the popular and commonly traded cryptocurrencies, saw an increase of 70% since the beginning of the year, taking the crypto market to a whopping $2 trillion. This explains why many popular financial companies, including Goldman Sachs, showed interest in the cryptocurrency market.

In the same year, Coinbase—a platform that facilitates buying, storing, and selling of cryptocurrencies, launched. Coming to the year 2023, the crypto market slowed down in September, which had always been a bad year for the industry. That’s mainly because the Federal Reserve announced that the interest rates will remain high for the remaining year. That led to a drop in the prices of crypto. Before getting to the top predictions for the crypto market in 2023, let’s check out the industry’s performance.

Crypto Performance So Far

Despite the controversies of FTX and Binance (the popular crypto trading platform), Bitcoin has seen a surge of 5.1% and was traded at $27,155. Ethereum also witnessed a hike in its prices by 3% and was traded at $1,684. That being said, Bitcoin and Etherum have reported their biggest lows since 2018.

If we look at crypto’s performance in September, Solana turned out to be the best performer with an 18.9% gain, whereas Dogecoin experienced a loss of 1.5%.

The popularity of memecoin, including Dogecoin, was short-lived. Soon after Elon Musk invested in DOGE, there was a sudden spike in these memescoins and many new coins emerged. However, they started declining in popularity a year later.

SEC Delaying the Approval of Bitcoin ETFs

One of the reasons the crypto market experienced a downfall in September was the SEC (US Securities and Exchange Commission) declining the Bitcoin spot exchange-traded funds. They declined it in August and have decided to postpone it further until January 2024, despite Congress requesting the SEC over and over again to approve the Bitcoin ETF.

The U.S. Securities and Exchange Commission has approved many ETFs, including BITO, XBTF, and so on, but it keeps rejecting the Bitcoin ETFs. And it is not new. It’s been happening since 2013. In response to the request, they have said that the reason they are delaying the decision is because of the concern regarding the investors and the increase in fraudulent activities in the cryptocurrency market.

In September, the members of Congress sent letters to the SEC to avoid delaying the decision and approve the Bitcoin exchange-traded funds as soon as possible, as there was no point in postponing it. Congress has to ensure that all new investment products that have the potential to get more investors should be launched.

Many researchers believe that Bitcoin is of great value and thus sees a high demand from different investors. It’s a perfect way to diversify your investment portfolio.

Grayscale’s ETF Request Declined

In August, Grayscale filed a lawsuit against the SEC for not approving their request to convert their Bitcoin trust into an exchange-traded fund and the court sided with the company. SEC had approved many similar requests recently and those also involved exchange-traded funds.

SEC could not prove that Grayscale’s ETFs would be less safe for the market since they had previously approved Bitcoin Futures ETFs. The Commission justified its decision by stating that the company had failed to give proof that it had implemented the right steps to prevent any fraud or wrong practices due to its exchange-traded funds. Grayscale claimed that the commission had accepted Valkyrie’s ETFs, which were the same futures-based ETF products as that of Grayscale. The court has asked the SEC to review their application again.

Binance Might Be the Next Crypto Company to Collapse Following FTX

The Federal Open Market Committee has announced to keep the interest rate higher as of now. This has led to a downfall in the crypto market, as the high-interest rate makes it challenging for crypto companies to borrow funds. This explains why a majority of crypto companies had to struggle in the last quarter of 2022. People thought the worst that could happen in the crypto market was the FTX exchange collapsing, but the new studies show that if the interest rates keep rising at the current rate, Binance (one of the largest and most popular cryptocurrency exchange platforms) might get into trouble too.

Binance, which is considered the safest cryptocurrency exchange and the largest platform to trade all kinds of cryptocurrency coins, had to terminate the jobs of around 1,500 employees. Not only that, but many executives left their jobs at the company. Binance was also accused of illegal operations in the States, as well as mishandling customers’ funds. The company is currently being investigated and might face criminal charges if the accusation turns out true.

The spike in the interest rate and the ongoing investigation plus the charges against Binance might be the reasons why the company’s revenue has seen a drastic downfall, of up to 70% to date. The company’s co-founder and executives mentioned that Binance is indeed in a difficult stage and if it also collapses like FTX, the crypto market might experience a liquidity crisis.

Crypto Market Trends and Forecasts : What to Look Out For in October 2023?

The co-founder of FTX will have to appear in court for his first trial. He has been accused of 13 crimes and is currently facing seven charges. Another round of trials will start in 2024. As of now, the entire crypto market, analysts, and researchers are waiting for the SEC to give an update on the Bitcoin ETFs.

If the request gets approved, it would mean a significant boost in the crypto market and tons of opportunities for investors looking for new products to enter the industry. At the same time, Binance is also under investigation. The FTX’s co-founder trials might make a huge difference to the crypto prices, as it creates a negative impression of the market, leading to a substantial drop in the crypto prices.

The Digital Bank Chase UK has also made an announcement in this regard. It has banned all kinds of crypto transactions starting October 16. Now, its customers cannot trade cryptocurrency using the bank’s credit and debit cards. The bank stated that the decision was to protect customers’ interests, especially after the growing number of fraudulent cases reported on the crypto market.

Top Predictions for Crypto Market for 2023 and Beyond

All the above-listed events have a great impact on the cryptocurrency price and the market condition. Let’s check out a few popular trends that researchers forecast for the end of 2023 and beyond.

Prediction #1: Will Bitcoin See a Rise or a Drop?

A commonly asked question by crypto users is whether I should invest in Bitcoin or wait for its prices to drop further. Well, research estimates that Bitcoin prices will drop 21% to $21,525 in 2023. Because of the ongoing events, especially the Binance news, Bitcoin is currently in the bearish market and it doesn’t seem to make any significant recovery by the end of the year. However, analysts predict that it might start recovering and reach $45,200 by 2025. Then again, the prices of any cryptocurrency depend on global events.

Prediction #2: The Bitcoin ETF Might Get Approved

Some researchers believe the Bitcoin ETF might get approved this year or at the beginning of 2024. Although the Securities and Exchange Commission has postponed the decision until 2024, Congress and other major cryptocurrency companies are convincing the SEC to approve the first spot Bitcoin exchange-traded funds (ETF) to create more opportunities for people to enter the crypto industry. The SEC has been delaying it since 2013 and it might get approved this year.

Prediction #3: Increased Regulation

SEC and other regulators had already had their eyes on the crypto market and the companies involved in this industry. However, things are going to escalate after FTX’s trials and Binance being accused of mishandling customers’ funds. These were two of the most popular crypto exchange platforms. SEC’s accusation of Binance has had a significant impact on the crypto prices and might also create a negative impression. The government has not yet made many regulations or laws regarding crypto, but after these events, it might change.

Cryptocurrency appeared in Federal Law in 2021. It was about the tax implications of the crypto market, but that too won’t come into effect until 2024. Fortunately, the government is taking the initiative to create solutions that can stop criminal activity and wrongdoing on crypto platforms. That was a much-needed action considering the current fraudulent activities and the crimes reported on crypto platforms. There has been a loss of over $1 million due to such scams.

Prediction #4: Central Bank Digital Currency (CBDC)

To regulate the cryptocurrency market and prevent criminal activities on a decentralized blockchain, the US banks might release Central Bank Digital Currency, which will be state-operated and managed by the central government, compared to the decentralized systems. The main purpose of launching CBDC is to provide customers with all the investment benefits of crypto coins but minimize the risks that an investor faces in exchanging crypto coins on a decentralized blockchain. The good news is China has already started testing its virtual currency, i.e. e-CNY, and has made transactions worth more than $13.9 billion. Although it’s not yet started in the US, analysts are hoping that one of the steps the government takes to minimize criminal activities in the crypto market is to launch its own centralized version of virtual coins.

Prediction #5: Crypto’s Impact on the Climate

Another less-known yet significant trend associated with cryptocurrency is its climate impact. Do you know crypto uses around 240 billion kW hours of energy annually, which is higher than the overall electricity usage in Australia? You might wonder how crypto is associated with electricity usage. Well, Bitcoin uses a process called mining to create a safe and private platform for crypto traders to exchange their cryptocurrencies.

Mining involves mathematical puzzles, which take up a considerable amount of computational power. It requires a lot of electricity to run these operators. Sadly, there’s no way to cut down on electricity consumption, as proof of work (a method that enables miners to submit new codes to the blockchain) requires excessive computational power. Things seem to be getting worse for the United States since many countries have banned crypto mining. Up to 75% of crypto mining used to take place in China, but the country has banned it.

Prediction #6: The Growth of Cold Wallets

As mentioned previously, FTX was one of the largest crypto platforms with a valuation of $32 billion. However, the company went bankrupt and the co-founder was arrested. The government has already seized more than $600 million from the company. However, there are more than a million creditors who need to know whether they will get the $8 billion amount back.

Fortunately, the government has created a website that might help recover the losses, but there’s very little chance the creditors will get all their money back. This case has increased the demand for cold wallets, which is an offline cryptocurrency storage platform. It’s the safest way to store your cryptocurrency and prevent any damage from the company going bankrupt or hacks. FTX’s bankruptcy had affected many crypto companies that were associated with FTX. Many platforms have scaled down their operations and many employees working in crypto firms have resigned. Funding is also dropping dramatically. There was a 35% loss every quarter starting 2022 and the rate has increased to 70%.

Prediction #7: Bear Market Will Last

You may have heard of the crypto winter. Well, the investors are backing out, employees working at crypto companies are resigning, and many regulations have been imposed, all of which have led to the bearish market. The crypto industry has experienced the same downfall three times, and in each case, the market was down by 70%. This year’s crypto bear market is linked to the increasing interest rates, which don’t seem to decline anytime soon, plus the FTX’s case. The analysts have good news for investors, though. The Bitcoin market is expected to recover and reach $35,000 by 2023. Of course, whether the industry will soar or plummet depends on user sentiments, interest rates, and other factors.

Prediction #8: Memecoins Will Disappear Soon

Memecoins gained immense popularity in 2021 after Elon Musk showed interest in Dogecoins. He also made a public announcement regarding his investment in Dogecoins, which resulted in a significant rise in its prices from $0.01 to $0.73 within five months.

As a result, investors started showing interest in memecoins, which led to the creation of other memecoins, including Floki Inu and Baby Dogecoin. However, its growth didn’t last long. Memecoins lost their popularity in 2022 and the same continued in 2023. Investors are growing skeptical about this investment and are sticking to the regular cryptocurrency coins. Many of these coins have disappeared and those existing have seen a downfall of over 90%.

Prediction #9: Growth of DeFi

Decentralized Finance or DeFi enables users to carry out a vast majority of tasks that a financial institution offers, including getting interest, buying loans, lending money, trading assets, and buying insurance. What sets it apart from regular financial services is the fact that it’s faster and facilitates peer-to-peer transactions. There is no third party involved and the technology is open to all.

The best thing about DeFi is that it allows quick and easy access to all users without requiring them to create an account. You just need to create a wallet and you’re all set to start. Moreover, it’s pseudonymous, meaning it doesn’t require your name, email, or any personal information. DeFi runs on Ethereum Blockchain and it’s expected to gain a lot of popularity in the coming years.

DeFi deposits had increased $200 billion in 2021 and the same will keep increasing. Its aim to create a community where anyone can trade crypto coins and conduct other financial services without a middleman or a waiting time has attracted the attention of millions of traders.

Prediction #10: Ether Might Outperform Bitcoin

As mentioned previously, DeFi runs on the Ethereum blockchain, and NFT, which has been rising in popularity lately, is also on the Ethereum blockchain. This clearly shows that Ether has a chance to outshine Bitcoin in the coming years. It happened in 2021, when Etherum and Bitcoin gaining were 418% and 66% respectively. There’s a good chance that Etherum will continue to do well, even in the bearish market.

Will the Bear Market be Over?

Despite the ongoing liquidity crisis and a prolonged bear market that doesn’t seem to end anytime soon, analysts and professional investors are positive that 2024 will bring a significant change to the industry. That’s probably because the cryptocurrency market has witnessed several downfalls in the past and has shown great recovery. So, it’s safe to say that investors can look forward to an improved outcome and a better crypto market with the possibility of higher returns.

One of the reasons why the crypto industry recovers from the bearish market is the fact that most investors take advantage of the low prices. This results in a sudden increase in returns and liquidity. Besides, more investors will be interested in joining the crypto market, especially after SEC approves the Bitcoin exchange-traded funds. Once cryptocurrency enters the bullish market, investors’ confidence in the virtual currency will grow, which might strengthen the industry.

That said, we can’t predict how well Bitcoin, Ethereum, and other cryptocurrencies will perform in 2024. It can’t be said that the blockchain will increase with certainty either. However, we are expecting increased scalability and higher transaction speed.

The Impact of WEB3

WEB3 is a relatively new technology that’s expected to make a big difference in the blockchain market. Not just blockchain, but the technology will revolutionize the way we use the internet. In terms of blockchain technology, WEB3 will offer people more control over storing and transferring their data freely without the fear of leaking it to a third party. Simply put, the internet will be more secure and that will significantly reduce the risk of data breaches.

Conclusion

The crypto market is the most volatile industry. With the prices of Bitcoin and cryptocurrencies fluctuating frequently, keeping up-to-date with the latest regulations is key to knowing the trends in the cryptocurrency business. Although 2023 has been a bearish market, we are expecting to see a change starting in 2024. The industry might recover, but a few things like the SEC approving Bitcoin ETF and the FTX case resolution will determine the outcome.

Researchers have been studying the market since the beginning and they have witnessed a steady growth. If everything goes well, the year 2024 might bring a positive change in the cryptocurrency industry, for existing and new investors. As more and more people are investing in cryptocurrency, there will be an increased demand for employees in the sector, thus contributing to the industry’s growth. There have been many such trends and forecasts made by different analysts in the crypto exchange market. While some of that turns out to be true, there’s no certainty, as the price fluctuation and the overall market condition depend largely on the economic condition and ongoing events. Binance being investigated for mishandling customers’ funds, for instance, can break people’s confidence in the industry and result in many investors backing out.