After the horror year 2022, the market will regain stability in the new year. In 2023, the focus should be on patient investment. The harvest: from 2024. By Gerd Weger
At the start of the year, after a year of horrors, things could once again look to the future. The mess left by the collapses of Terra in May and crypto exchange FTX in November is slowly being picked up again. The US arm of the world’s largest crypto exchange, Binance, wants to take over the assets of bankrupt lending service Voyager Digital, which is worth more than US$1 billion. Voyager collapsed after Terra crashed, was taken over by FTX, which itself went bankrupt soon after. All in all, more stability can be expected in the crypto market again in the new year 2023. Bad players like Terra and FTX are likely to focus faster in the future, as the market has become much more sensitive to these scams and manipulations.
Cryptocurrencies: Crypto Winters Don’t Last Forever
Crypto winters don’t last forever. There may well be one more ultimate sale. Compared to the length of the previous major crypto winters of 2014 and 2018, the current crypto winter would now be over. But there are still enough short-term stressors. Along with known factors, such as ongoing crises and rising interest rates, there are also factors specific to the crypto market. After multiple delays, 141,000 Bitcoin and the same amount of Bitcoin Cash may soon be paid out to victims of the Mt.Gox sinking. By January 10, 2023, aggrieved parties must register with a law firm in Tokyo. As repayment options, creditors can choose between a normal bank transfer and a payment in cryptocurrency.
This is how it will continue in 2023 for Bitcoin and Ethereum
We should also expect increased supply pressure for the second largest cryptocurrency, Ether. With the Shanghai Ethereum upgrade scheduled for March 2023, Ether previously stuck in staking could then be withdrawn and sold. After all, there are currently 15 million ethers on the Beacon chain and therefore around twelve percent of the total coins in circulation. The release of these staked ethers could lower the price, also considering the sharp drop in stocks on crypto exchanges after the FTX crash. So it remains exciting to see if Ether can continue the strength it has gained since mid-year against Bitcoin into the new year.
Over the past three years, Ethereum’s share of the total crypto market capitalization (dominance) has increased from 7.0% to 18%. In contrast, Bitcoin’s dominance fell from 68% to almost 40% over the same period. A wise core investment in the crypto market should consist of these two biggest cryptocurrencies. The investment amount for this base investment would be split roughly in proportion to the market capitalization. According to the current state: around 70% in Bitcoin and 30% in Ether. As already mentioned several times, such a basic investment should be gradually built up via a savings plan. If you implement this strategy, you will then create a solid base with average purchase prices to benefit excluding taxes from the sharp price increase expected from 2024.
By the way: With the new BÖRSE ONLINE Best of Crypto Index, you can invest directly in ten major cryptocurrencies with a certificate traded in Germany. Including Bitcoin and Ethereum.
Conflict of Interest Notice
The CEO and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions in the following financial instruments mentioned in the publication or related derivatives which may benefit from any price movements resulting from the publication : Bitcoin, Ethereum
Conflict of Interest Notice:
The price of financial instruments is derived from an index as the underlying. Börsenmedien AG developed this index and owns the rights to it. Börsenmedien AG has concluded a cooperation agreement with the issuer of the securities presented, according to which it grants the issuer a license to use the index. In this respect, Börsenmedien AG receives a fee from the issuer.