Let me start by wishing you all the best in 2023, a good health and lots of happiness.
My newsletter subscribers already received an overview of 2022 and what we can learn from it. If you like to stay informed on the latest news and offers, you can still subscribe here.
That being said, let's jump straight into the subject. What can we expect from crypto in 2023?
Crypto and central banks:
This year we are in new territory on a macro economic level. After a decline of interest rates during the past 10 years, they are shooting back up now. Especially the fed (US central bank) is going really hard. They raised their rates from 0 to 4,5% in 2022 and they don't look like reversing this trend any time soon. The ECB (European Central Bank) has been raising its rates too, but at a much lower pace. From 0 to 2,5% in 2022.
What has this to do with crypto? In past years, money was cheap because of low interest rates. On top of that, central banks flooded the markets with extra money by buying up bonds. All this influx of money went into houses, stocks and crypto. That's one of the reasons why we saw such a spike in prices on all these commodities.
But now, central banks are tightening the money supply. They do this by raising interest rates and selling bonds. As a result, when people need money, they will get their money back from their investments. supply will be higher than demand which in return lowers the price. But that's not all. Governments are dependent on these rates too. They will have to pay more on their outstanding debts and in return will have to push for extra saving measures.
As long as central banks keep up this policy, I don't think there will be another bull market soon. But that doesn't mean it is necessarily bad. With bitcoin, Ethereum and other coins in decline you might be able to buy at a serious discount. The only pitfall is to determine where we will hit the bottom. I personally don't think we have reached it yet.
What about alt-coins?
2023 will also be critical for many alt-coins. Currently there are more than 22.000 crypto projects and they all have their own tokens. 2022 has been a graveyard for several crypto firms and I expect 2023 to continue this trend. Is this bad news? It depends. If you are invested in these risky alt-coins, yes. But I think it's also a good thing for established coins like Bitcoin to gain more strength and become even more established which might be a positive on the price in the next bull run.
Bitcoin might go down a bit more and move sideways for the coming time. Many alt-coins will face a hard time and we will probably see several go down this year too.
As you can read, it looks like all bad news, but if you can read between the lines, you'll notice there are also opportunities. But be careful and always do your research before jumping into a project. This is what we do in my course for Bitcoin and Ethereum and you should do it in the same way for every other coin. Crypto still is a very risky and volatile market.