2023 State of the Crypto industry
2022 has been a turbulent year for the sector. It ended with the collapse of crypto exchange FTX, including the December arrest and extradition of FTX founder Sam Bankman-Fried.
The total market capitalization of the global cryptocurrency market peaked at over $2.9 trillion in November 2021. As of this writing, the market cap now stands at just $888 billion.
You can see below the top 10 cryptocurrencies by market cap as of today. For context, Bitcoin peaked at around $1.25 trillion, and is only now worth just north of $330 billion.
In addition to FTX, other notable 2022 crypto failures are: Terra Luna/Terra USD, 3 Arrows Capital, Voyager, Celsius, and BlockFi.
All of the above downfalls, (especially FTX) have triggered renewed calls for heightened regulation of the crypto space. This is a welcomed development for those like me that strongly believe in both the technology, and the role that Bitcoin will have in our financial future.
Likely outcome of heightened regulation:
99% of cryptocurrencies will be regulated as securities, because that is what they are.
Crypto exchanges will probably have to register as Broker-Dealers.
The ICO market will cease to be the Wild West, and will be subject to heavy scrutiny by the SEC.
The obvious winner will continue to be Bitcoin, as it is already treated like property by the IRS for tax purposes. The CFTC treats Bitcoin like a commodity, and that difference in classification is in my opinion the only point that needs reconciliation.
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