These events indicate a crypto year 2023 marked by technological innovation, market fluctuations, regulatory changes, and growing acceptance of cryptocurrencies by governments and financial institutions.
- The year began with the total cryptocurrency market cap surpassing $1 trillion, signaling renewed investor confidence.
- Genesis, a major crypto company’s lending unit, filed for bankruptcy.
- Bitcoin’s price rose to over $21,000.
The introduction of Bitcoin Ordinals was a key development. This new concept allows the inscription of full content directly onto Bitcoin’s smallest units, satoshis, representing a major technological advancement.
More about BTC Ordinals
Bitcoin ordinals are a new method for storing data on the Bitcoin network, introduced by software engineer Casey Rodarmor. They assign unique serial numbers to Bitcoin’s smallest units (satoshis) and are used to attach data like text, images, or audio to individual satoshis. This creates Bitcoin NFTs, or digital collectibles, on the Bitcoin blockchain. While critics argue that ordinals divert from Bitcoin’s original purpose and could congest the network, supporters see them as a secure data storage method and a way to attract new users to Bitcoin.
However, Bitcoin NFTs differ from traditional NFTs as they don’t support creator royalties and have a smaller maximum storage size. For more details, you can refer to the Fidelity article on Bitcoin ordinals here.
- Significant regulatory actions took place. Banks friendly to crypto, like Silvergate and Signature Bank, closed.
- The Indian government brought crypto assets under the Prevention of Money Laundering Act (PMLA).
The European Union introduced the Markets in Crypto-Assets (MiCA) regulation, setting a precedent for global crypto regulations.
The introduction of the Markets in Crypto-Assets (MiCA) regulation by the European Union is beneficial for the crypto industry for several reasons:
- Increased Legitimacy: Formal regulations from a major economic bloc like the European Union add legitimacy to cryptocurrencies as a financial asset class.
- Investor Protection: MiCA aims to protect investors by setting clear rules on transparency, disclosure, and the operation of crypto services. This reduces the risk of fraud and scams, making the crypto market safer for investors.
- Market Stability: By introducing regulatory frameworks, the EU can help stabilize the often volatile crypto markets. Regulations can reduce the likelihood of market manipulation and other unethical practices, leading to a more stable and predictable market.
- Innovation and Growth: Clear regulations can foster innovation by providing a structured and safe environment for new ventures. Companies can innovate and develop new products and services within a defined legal framework, promoting growth in the crypto sector.
- Bhutan announced a $500 million fund for crypto mining.
- Hong Kong allowed crypto trading for retail investors on verified and authorized platforms.
- The SEC took action against major crypto exchanges Binance and Coinbase.
- Bitcoin soared past $31,300, reaching a one-year high.
- The SEC lost a case against Ripple regarding XRP.
More about the case
In 2023, Ripple Labs won a significant legal victory against the U.S. Securities and Exchange Commission (SEC) in a case involving its XRP token. The U.S. District Judge Analisa Torres ruled that Ripple did not violate federal securities laws by selling XRP on public exchanges. This decision was a major win for Ripple, as it clarified that the sales of XRP were not offers of securities under the law. The case was closely watched as it had implications for the broader cryptocurrency market and regulatory approaches to digital assets
More about WorldCoin
Worldcoin, co-founded by Sam Altman, has been making significant strides in the crypto space in 2023. The project is aimed at creating a global digital identity system and, where possible, a digital currency (WLD) received simply for being human. Here are some key aspects and developments related to Worldcoin this year:
World ID: The project has developed a unique system called World ID, which uses iris biometrics to establish a person’s identity. This process results in a digital World ID that can be used pseudonymously for various applications. There are different levels of authentication offered by Worldcoin, ranging from a basic World ID created via the Worldcoin app to a more secure version that includes iris scanning and facial recognition.
Integrations and Expansions: Worldcoin has expanded its integrations to include platforms like Minecraft, Reddit, Telegram, Shopify, and Mercado Libre, as well as its eye-scanning verification services to Mexico and Singapore.
Privacy and Regulatory Landscape: While Worldcoin’s iris scan technology is innovative, it has raised concerns regarding privacy and data security. There have been active investigations in several countries focusing on the legality of data collection, consent processes, and secure data storage.
Funding and Support: Worldcoin has secured significant funding, approximately $100 million, with support from notable investors like Andreessen Horowitz and Khosla Ventures.
Potential Impacts and Challenges: The project aims to include underserved communities in the digital economy, protect against AI threats, and potentially pave the way for financial inclusion and even a global universal basic income system. However, it also faces challenges due to its centralized control and the reliability of the hardware involved in iris scanning.
- PayPal launched its stablecoin. (You can review more about this stablecoin in our previous post)
- A US court ruled that the SEC was wrong to reject Grayscale’s application for a Bitcoin ETF.
More about Bitcoin ETF
An ETF, or Exchange-Traded Fund, tracks the performance of a specific index, sector, commodity, or other assets. Investors can buy and sell it on a stock exchange just like a regular stock. An ETF combines the features of an index fund and a stock:
Diversification: Like mutual funds, ETFs provide investors with a way to invest in a basket of assets. These assets can be stocks, commodities, bonds, or a mix of investment types.
Trading: ETF shares trade on public stock exchanges, letting investors buy and sell shares throughout the trading day at market prices.
Transparency: ETFs typically provide high visibility into the assets they hold, often disclosing their holdings daily.
- Sam Bankman-Fried, former head of a major crypto exchange, was found guilty of fraud and money laundering.
- Bitcoin’s price surged, and Binance settled legal issues for $4.3 billion.
- Bitcoin’s price continued to rise in anticipation of ETF approvals.
- Google allowed US Crypto trusts to advertise.