Since November of last year, prices have seemingly done nothing but go down. That isn’t even the worst of it. For those of us who have been in crypto for several years now, that is all something that you have become accustomed to. After living through each 4 cycle of bullish and bearish patterns. If 2021 in crypto could be summarized, it would be called the year of over-leverage, greediness, or self-inflicted wounds. Those who participated in those types of activities were punished and taught a difficult lesson that we won’t soon forget. We saw some of the largest funds and companies in the market become insolvent and big crypto projects go nearly to zero. For example 3AC, Celsius, Voyager, Vauld, LUNA/UST, and more. Even if you weren’t liquidated by partaking in risky high-leverage trading. There is a good chance that you got caught up in either one of the crypto lending services going under, or had money invested in Luna/UST.
Which resulted in either your funds being frozen on those services or the value of your crypto becoming worthless. We were all given a rough reminder of how risky crypto can be and how important it is to take custody of your own crypto. While it is great to earn interest on your crypto, the most important thing is actually surviving the money and not losing your coins. Looking Ahead to 2023
While the world will likely be a mess for quite some time, and many people will suffer financially because of that. On the crypto front, there is finally some hope that is beginning to build up. The FED Pivoting The reason for that momentum of hope is that most experts are predicting that the US FED will soon be pivoting from their hawkish interest rate hikes to attack inflation. Which has been one of the main reasons why risk-on financial markets such as Bitcoin, crypto, and tech have been tumbling this year.
The US is heavily and debt and cannot afford to continue aggressively raising rates. It would cause the economy to break. Everyone knows that the US will need to adjust its strategy sooner than later, and until then all eyes are watching this situation. All it would take is one sentence from FED chairman Jerome Powell saying that the FED will begin to wind down its rate hikes or be less aggressive in doing so. When that happens, it has been predicted that the stock market will see an instant 10% or more increase in value. If that is what happens with stocks, we can only imagine what will happen to the more volatile crypto assets. A one-day increase of 30% or more is not out of the question. This won’t happen today, and may not happen next week or even next month. But, it will be happening within the next 3 to 6 months. The World is Reminded of the Real Value of Bitcoin Throughout most of Bitcoin’s history, it acted as an uncorrelated asset when compared to other traditional financial assets.