After the catastrophic $1.5 trillion crypto market crash of 2022, a sense of avarice is beginning to replace the sense of doom. This has been evidenced by the 160% increase in Bitcoin’s stock price and its market cap increasing by $530 billion.
The Solana Investors, backed by Sam Bankman-Fried, have taken on more risk by buying memecoins with dog and frog themes. For example, an investor who invested $1,00,000 in Solana would potentially gain over $8,000,000.
Much of the optimism is due to the potential approval of the first Exchange-Traded Fund (ETF) that invests directly into Bitcoin by US regulators. If this bet pays off, an investor will receive $10. Michael Saylor, co-founder of Bitcoin Holder MicroStrategy Inc, spoke on Bloomberg Television about the potential demand shock the approval of the spot ETFs would bring.
Despite the bullish sentiment surrounding cryptocurrencies, many still view them as worthless and a safe haven for criminals. This was evidenced by Binance, the largest exchange in the world, agreeing to pay $4.3 billion in fines for a variety of violations in November 2020, forcing their CEO Changpeng Zhao to resign.
Bitcoin’s rally this year has outpaced stocks and gold, with supporters claiming that the halving event in 2024 will curb supply growth and bolster the token. It currently trades well below its original price, but is still far from being the most popular, with the 2021 record almost reaching $69,000.
The derivatives market for Bitcoin has also exploded in 2023, with open interest on Deribit, the largest crypto options exchange, exceeding $16 billion for the first time in December 2020. This was followed by CME also reaching record levels of futures open interest.
Decentralized finance is yet to recover from the collapse of TerraUSD stablecoin in 2022, worth over $40 billion. However, the value of all locked assets in Liquid staking protocols, which makes it easier to receive rewards for tokens used to operate blockchains, has reached a record high this year.
Non-fungible tokens (digital collectibles) have also seen an increase in weekly trading volumes, although this is still far from the $1.8 billion seen in 2022.
Finally, the market share of cryptocurrency exchanges has changed dramatically this year, with Binance losing the majority of their market share to Upbit, Bybit, and OKX.