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By Charlton Haupt, Founder — Bad Astro Society
The bitter winds of crypto winter' are still causing shivers down the spines of investors. An unprecedented cold front swept through the market when cryptocurrency prices dropped after the collapse of TerraUSD and LUNA in early 2022, but the dead of winter set in when the crypto exchanges FTX, FTX.US, and BlockFi filed for bankruptcy this past November.
For perspective, the market cap of the largest 100 cryptocurrencies hit $2.7 trillion in November of 2021. The following November, in 2022, the market cap sank to $830 billion. Here’s what that could mean for the crypto market as we move into 2023.
2023 predictions for the current crypto winter
No one can say for certain how long the crypto landscape will remain bleak and foreboding, but hindsight helps us make predictions. The previous crypto winter started in 2018; a year earlier, in 2017, we watched Bitcoin's price skyrocket from $1,000 to over $19,800.
Following this sky-high growth, the market plummeted almost 60% in February 2018, and we hunkered down for a hard crypto winter. That winter's icy conditions persisted until early 2021, when prices again shot through the roof.
Crypto winters are still new, and there is no precise measurement to set exact parameters on the season. Still, one doesn't need a thermometer to know we're in the dead of winter — crypto prices have plunged nearly 70% — but can we safely assume we're on the way up?
Hindsight leads us to surmise that the average crypto winter lasts between 12 and 18 months. We are just passing 12 months on the current winter, and the bear market should be over before May of 2023. We have endured daily downtrends since November 2021, so when the uptrend begins, it will signal a risk-on environment for everyone waiting winter out on the sidelines.
2023 predictions for Bitcoin
All technical indicators show that another leg down for Bitcoin between $10,000 and $12,000 is imminent. At this point, it seems everyone is just waiting for the final drop.
However, just like those who were expecting Bitcoin to reach $100,000 last year, the markets may decide that this $16,000 area is the bottom. We'll see how the next six months play out, but I expect Bitcoin will have confirmed the bottom by then, and the next bull run will begin.
2023 predictions for Ethereum
Since Ethereum's two-stage merge — codenamed “Bellatrix” — Ethereum has become deflationary, which is incredibly bullish for the altcoin. I expect when Bitcoin has set the bottom, Ethereum will be one of the biggest winners when the market bounces back.
2023 predictions for stablecoins
I expect stablecoins to remain as they are, unless one of them depegs in this bear market. There have always been clouds of fear and uncertainty in regard to the largest stablecoin, Tether. No one knows whether or not it is a Ponzi scheme that will eventually collapse on itself, but it has held through the years.
With each downturn of a market, stablecoins are put through a stress test. If they do fail, they will wipe out a large segment of the market, and there will be a massive impact on crypto. In that event, we could potentially see Bitcoin for as low as $3,000.
Overall, my outlook for crypto in 2023 is hopeful. When FTX crashed, it made a lot of noise, but historically it is not as detrimental as Mt Gox — an exchange that went belly up in Bitcoin's early years. I see FTX acting as a catalyst to set the bottom; quite possibly the last storm of winter. When the dust settles in the coming weeks, we can hope to see crypto markets finally thawing for a healthier spring.
Author Bio
Charlton Haupt is the Founder and CEO of Bad Astro Society. He’s also a husband, father, friend, adrenaline enthusiast, and lover of all things crypto and the outdoors. When Charlton isn’t watching sports, he’s constantly up to date on the latest news in the crypto market.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.