A lot of confusion regarding the future of cryptocurrency is prevalent in the market right now, especially after the recent de-pegging of the USDC stablecoin. If you search “is Bitcoin dead” on Google, you are likely to come across conflicting opinions.
Most crypto experts predict cryptocurrency will rise in 2023; the opposite is true for most naysayers who keep asking is crypto dead now?
A 30-second Coinbase ad, which aired during the Golden State Warriors game against the Mavericks on Friday, pointed out that people have been naysaying crypto in exactly the same way for the last 10 years: by declaring it dead.
The commercial is also a complete 180 from crypto companies’ hype-fueling Super Bowl ad blitz. Coinbase’s own Super Bowl ad, a mysterious commercial featuring a floating QR code, brought 20 million people to the company’s website in a single minute.
Coinbase makes a good point. Although most might not be encouraged to use Coinbase to buy the dip, the historical context is useful as people contemplate crypto’s future.
In this post, we will provide a definite answer about whether cryptocurrency is dead, or whether the outlook is more positive than you think.
Did Crypto Take a Fatal Hit in 2022?
Cryptocurrencies started off really well at the start of 2022. But unfortunately, the enthusiasm did not last long despite being astronomically high. By the end of the year, major coins like Bitcoin and Ethereum along with other altcoins were deep down.
LUNA’s collapse in early 2022 cost more than $60 billion to investors, as the native Terra coin lost its entire value within a week. This sparked widespread fear among the crypto community.
Other catastrophic events like FTX exchange crash further added fuel to the fire and caused massive panic among cryptocurrency investors. The company had a value of $32 billion at the start of 2022. Now, it has gone bankrupt and the founder of FTX, Sam Bankman-Fried has received charges of fraud.
After such turmoil, it is natural for one to ask, is crypto dying? In short, the answer is, no. Cryptocurrency is certainly not dying. Although, one cannot help but agree with the fact that 2022 has been rather rough for cryptocurrencies and DeFi.
Nevertheless, it is during times of despair and hopelessness when bold risks reap massive rewards. True believers of Bitcoin and cryptocurrencies have still not given up and expect the crypto winter to end in 2023.
Is Crypto Dead? Our Crypto 2023 Outlook
Based on lessons learned from the past, every time the crypto market undergoes a crash and recovers, a handful of projects survive. Bear markets usually weed out old and weaker projects as they lose their demand and die off.
Today, only two major cryptocurrencies are accepted as blue chips: Ethereum and Bitcoin. Of course, nobody can fully guarantee the long-term survival of these coins. However, since these coins have very high-value propositions and a strong track record, it is safe to say that these major coins are here to stay.
While Bitcoin is the gold standard in the world of cryptocurrencies, the Ethereum network runs on countless devices and supports decentralized applications. So, Ethereum’s application in various industries means that its demand in the future can further increase.
Since both the value proposition and the underlying technology of cryptocurrencies have not changed, buying Ethereum and Bitcoin at their current prices would be no different than buying them at their all-time highs. Most crypto loyalists understand this concept and hence, the market’s conviction is strong. Of course, some investors may choose to stay out of the market during the bear market, but this will not mark the end of cryptocurrencies.
So, cryptocurrency is certainly not dead and the outlook in 2023 looks decent. However, the short-term and medium-term do not look very bright, especially with the recent depegging of USDC. However, some experts claim that this depeg is not a strong enough reason to panic.
Current Crypto Prices for the Top Cryptocurrencies in 2023
The cryptocurrency market right now is huge. As fear and uncertainty rise in the crypto community, many altcoins are struggling to survive. In times like these, the highest market cap coins, especially the blue chips are a safer investment.
In this section, we will discuss the current crypto prices and trends of the top cryptocurrencies by market capitalization.
Bitcoin is the top cryptocurrency by market capitalization, and people accept it as a gold standard. They priced it at around $20,500. However, some experts have been signaling that Bitcoin has the potential for further downside.
So, it might reach the $18000 mark because the short-term looks rather grim. But once the crypto winter ends, there is no reason we cannot see Bitcoin reaching its all-time high once again.
Ethereum has a great value proposition and its network allows businesses to run their dApps featuring smart contracts. Hence, Ethereum has vast applications in various industries. This strong use case makes it a safe investment for the long term.
Currently, Ethereum has dipped lower, around the $1470 mark after the USDC depeg. However, it did peak at $1740 on the 16th of February, 2023. Experts believe that Ethereum has the potential to reach $2000 by the end of 2023 because of the increasing adoption of smart contracts.
With a market capitalization of more than $70 billion, USDT is also a safe investment for a long-term hold. Tether is a stablecoin backed by Euro and the US dollar, and it keeps its value equal to one of the denominations.
However, the recent depegging of USDC has slightly shaken the trust in stablecoins. Nevertheless, Tether is still highly favored by cryptocurrency investors who do not want to face the uncertain volatility of other tokens.
By the end of March 2023, Binance Coin reached a price of $286, which is quite some gain, considering its price was only $0.1 in 2017. Currently, its price has dipped around the $276 mark, but that is because of the ongoing fears in the crypto world. The month of March is going to prove to be critical for determining the course of BNB this year.
Binance Coin is the native cryptocurrency of the Binance platform, which is among the largest cryptocurrency exchanges globally. They used this coin for trading and paying fees on the Binance platform. With increasing adoption, the use cases of Binance Coin are also increasing, such as the ability to book travel arrangements.
USDC currently has a market cap of roughly $39 billion and has marked a decrease of 4 percent in the 2nd week of March. Being a stablecoin, it is pegged to $1. However, the coin depegged in 2023, and its current price is around $0.96, which has sparked great fear.
The future condition of USDC will strongly determine the course of the cryptocurrency market because USDC has a massive market cap. A crash in USDC could result in the entire cryptocurrency market spiraling down. However, it is unlikely to happen albeit possible.
Crypto Isn’t Dead…But Is It Dying?
Well, the current state and short-term future of cryptocurrencies are very grim. However, there is still some light at the end of the tunnel. The overall outlook for cryptocurrencies is quite positive in 2023 and the market is expected to start recovering by the end of the year. So, cryptocurrency is certainly not dying!
There are certainly bad apples in the crypto barrel but the industry must find a way to root out dubious intentions and misdirected comments. For one, Charles Hoskinson, Cardano chief, warns against ways that crypto personalities in the market spread fear, uncertainty, and doubt (FUD).
The controversial CIP-1694 proposal describes a mechanism for on-chain governance, which is meant to support the Voltaire phase of the Cardano network. The document further builds upon the original Cardano governance scheme centered around a specific number of governance keys.
Product leader and Web3 advisor Vanessa Harris claims that the power concentrated within the constitutional committee makes it centralized and difficult for the committee to be replaced.
How Does the Current Market Cap Compare to Previous Years?
The cumulative market cap of cryptocurrencies went down dramatically between May 2021 and June 2021, as digital coins became less likely of an investment tool. They attributed this to China’s effort to stem mining and the expansion of cryptocurrencies within the country. Bitcoin’s market cap made up most of the overall market capitalization.
Bitcoin is edging closer to reaching its finite, maximum level of supply, pushing its price up and making it more difficult to mine. As a rule of thumb, the fewer coins available to the general audience, the higher the value of the cryptocurrency becomes. The market price reflects supply and demand when no more mining is possible because the coin’s maximum supply has been reached.
On the other hand, Blockchain.com wallets, something that makes purchasing Bitcoin possible, reached over 81 million wallet users in 2022. User figures for multiple cryptocurrency apps worldwide grew significantly in 2021, as is revealed when comparing download figures from the Coinbase, Blockchain Wallet, Crypto.com, BRD, Trust, Luno, Binance, Bitcoin Wallet, Bitcoin Wallet by Bitcoin.com, and Coinbase Wallet apps. This phenomenon can be taken to mean that despite the risks, the use of cryptocurrencies is spreading.
Our Final Thoughts On Cryptocurrency in 2023
As always, it is important to remember that cryptocurrencies can be extremely volatile and the market can quickly take the worst course. Events like the FTX crash, LUNA crash, and USDC depegging are enough to suggest that nothing in the crypto world is fully safe.
Lawmakers in the U.S. are taking a closer look at crypto, and while it’s unclear exactly how or when regulations will come down the pipeline stateside, that possibility seems more real in Europe.
However, taking informed and calculated risks differentiates successful traders from rookies. Since the current state of cryptocurrencies is very grim, we suggest you tread very carefully and stay clear of investing until the outlook becomes more certain.
In the bigger picture, the outlook is very positive and an improvement in the market is expected by the end of 2023. So, in the current scenario, it is all about patience and making high-conviction moves when investing.