In an industry that moves like no other, crypto has had “a year like no other,” according to an update from BitMEX.
BitMEX, which was once the leading crypto derivatives exchange but experienced major regulatory challenges and enforcement actions a few year back, noted in a blog post that as 2023 rounds to an end, they’ve taken a look back at the key events that transpired and how they shaped the industry.
BitMEX mentioned in a blog post that the crypto markets had “a bearish entrance into 2023 while battling the aftereffects of FTX and a challenging macroeconomic backdrop.”
BitMEX pointed out that a banking crisis in March “with the collapse of Signature Bank, Silicon Valley Bank, Silvergate, and Credit Suisse et al brought a ray of light to crypto winter.”
The update also mentioned that the Bitcoin price accelerated its recovery “with talks of Bitcoin spot ETF applications from Blackrock, Fidelity, and other TradFi juggernauts.”
According to BitMEX, the BUIDL market returned “to Bitcoin and Ordinals reached an all-time high, pushing Bitcoin on-chain transactions to new heights.”
The report further noted that the SEC started “receiving increased pressure to clarify crypto regulation after going to battle with Kraken, Coinbase, and Ripple – subsequently over 40 countries announced their regulatory frameworks.”
As widely reported, Sam Bankman-Fried was “convicted on all seven charges, facing up to 115 years of imprisonment.”
As covered, Binance has “pleaded guilty, paying a $4.3 billion fine to the US Department of Justice and CZ stepping down as CEO.”
The Solana ecosystem overpowered Ethereum “with new project rollouts and improvements, leading to a 500% increase in the value of SOL.”
BitMEX added that Meme coins “made a comeback through the likes of PEPE, SHIB, DOGE, and BONK.” And Pre-IEO listings began “to gain popularity, with BitMEX standing at the forefront.”
As explained in the update, the topic of macroeconomics and inflation undoubtedly dominated all conversations this year – the Fed “raised rates to the highest in decades, central banks were undergoing further monetary tightening, and economies were struggling with the effects of the COVID-19 pandemic.”
For context, the Fed then “executed its fastest rate hike in history – there were seven hikes in 2022 alone, with four more following in 2023.”
Challenging macroeconomic circumstances “meant customers’ risk appetite was low, and government bonds became the preferred class of investment. Banks underwent pressure to service long-term debt interests on a much higher cost of capital with inflation – and it didn’t take long for the first high-risk bank to crack.”
BitMEX further noted that customers began to panic and withdraw their funds, which led to runs on various banks. Multiple banking institutions, including Silvergate, Silicon Valley Bank, Signature Bank, and Credit Suisse, collapsed.”
As a result, government programs looked “to money printing via bank deposit rescue programs. Total money supply didn’t stop growing and the need for non-inflationary assets like gold and Bitcoin became evident.”
BitMEX’s report added that “the failure of long-standing centralised entities meant confidence in decentralised monetary systems increased – and people began looking to crypto as an alternative.”
The blog post also mentioned that rate hikes “continued up to June, with J.Powell playing the strong man in disguise. Only in August did inflation start to plateau, and the latest December Fed meeting reaffirmed that rates will remain steady or go south next year – which should reflect positively on the crypto market in 2024.”
The report also noted the altcoin that “captured everyone’s attention this year was Solana – which made a remarkable recovery starting Q3 after having taken a big hit from the FTX debacle.”
SOL, the native Solana token, “hit rock bottom in Q1 but like many others, it didn’t stop them from building. Their hard work eventually paid off and against all odds, SOL hit its pinnacle of $94 in December – a 500%+ increase since the beginning of the year.”
This is largely due to the “rollouts of improvements and projects within the Solana ecosystem – with projects like Jito Network sparking a DeFi summer through reintroducing airdrops, farming, NFT minting, and more.”
Looking back at previous market cycles in 2015 and 2019, it seems “a green candle is likely to come next in 2024.”
To top it off, interest from TradFi giants in Bitcoin spot ETFs, Real-World Assets (RWAs), and blockchain technology “indicates that the traditional and new are coming together.”
The recent price surges of Bitcoin have “laid out an upward path for crypto and 2024 holds great promise to be a pivotal year in the industry’s evolution.”
The firm concluded:
“At BitMEX, we took 2023 for what it was – a time to build and prepare for the next bull market. This meant more contracts, platform features, and upgrades to bring the best trading experience possible for our users.”