The year 2023 proved to be a challenging period for the cryptocurrency sector, witnessing the reckoning of bad actors that had flourished during the 2021 boom. As Bitcoin regained strength and overall market conditions improved, the stage has been set for digital assets to potentially redefine headlines in 2024.
The resilience and adaptability of the cryptocurrency ecosystem will undoubtedly be put to the test in the evolving dynamics of 2024. But before delving into the prospects of the future, here are 10 key events that unfolded in 2023.
XRP not a security
In a pivotal ruling, the court determined that XRP (Ripple Labs’ cryptocurrency) no longer qualified as a security. This decision marked a significant setback for SEC chair Gary Gensler and addressed a crucial legal issue regarding the regulatory classification of digital assets in the United States.
Changes at Binance: Zhao’s uncertain future
Binance, the world’s largest crypto exchange, underwent significant changes with a new CEO and heightened regulatory scrutiny. The company’s former CEO, CZ, faces potential legal consequences, leaving the future of the company uncertain.
FTX founder’s legal verdict
Sam Bankman-Fried, the founder of FTX, was found guilty on multiple fraud counts. While this might be perceived as a headline event, the consequential impact had largely unfolded before the trial began. Sentencing is scheduled for next year.
USDC depegging, banking regulatory actions
A tumultuous week witnessed regulatory actions leading to the closure of vital crypto infrastructure components: Silvergate and Signature banks. This upheaval disrupted the stability of the USDC stablecoin, causing a prolonged decline in its market share.
SEC’s grayscale setback
Bitcoin’s value surged following a U.S. court’s criticism of the SEC’s denial of Grayscale’s ETF application. This development paved the way for expectations of multiple Bitcoin ETFs in 2024.
Partisan divide in Washington
The once-obscure concept of blockchains in Washington evolved into a partisan issue. Cryptocurrency became a target for the White House, reflecting the Democrats’ determination to distance themselves from the technology. In contrast, Republicans embraced it, foreseeing potential advantages in their campaign fundraising efforts.
Celsius CEO’s legal troubles
Celsius, a company riding on prior hype, faced a turning point when its founder, Alex Mashinsky, was arrested. The company, which had amassed substantial funds during the previous boom, ventured into crypto lending. Mashinsky’s bold claims about traditional banks underpaying depositors became clearer as legal proceedings unfolded in July.
Ethereum staking dominance by Lido
The Ethereum blockchain’s security is now supported by more than 20% of the global supply of ether (ETH), with 40% of that managed by Lido, a staking derivatives protocol. While its success raised concerns about potential centralization risks, Lido’s governance token witnessed a notable doubling in value over the year.
Continued layoffs in top-tier crypto companies
OpenSea, a prominent player, was just one among several elite crypto companies announcing layoffs in 2022. Despite such measures, major entities, including Blockchain.com, Coinbase and OpenSea, experienced subsequent rounds of substantial workforce reductions in the course of the year. Even Binance, previously boasting about hiring after Coinbase’s 2022 cuts, had to acknowledge layoffs in 2023.
Competition in NFTs: Blur vs. OpenSea
The much-anticipated clash in the NFT arena seemed initially centered around the ethical dilemma of honoring artist royalties. Surprisingly, the real battleground emerged with professional traders, with the rise of Blur challenging the supremacy of OpenSea, the leading marketplace.
This year has generally been a rollercoaster period for the broader crypto industry, and companies such as HIVE Blockchain Technologies Ltd. (NASDAQ: HIVE) (TSX.V: HIVE) hope for better times for the industry moving into 2024.
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