Before we start our new year, let’s dive into a comprehensive review of the crypto landscape in 2023, delving into the events or factors that influenced its ups and downs.
Australia Becomes A Global Leader in Crypto Adoption
Australia has strengthened its standing as a global frontrunner in cryptocurrency adoption, boasting the highest adoption rate among developed nations at 23%. This outpaces figures for the United States (16%) and the United Kingdom (12%), with an estimated 4.5 million Australians presently owning crypto—an increase from 4.2 million in 2022 and 3.4 million in 2021.
A HedgewithCrypto report indicates that Australia’s crypto adoption has more than doubled since 2020, reaching 18% in 2023, positioning Australia ahead of the United States, which encountered regulatory challenges in 2023. The surge in online searches, with 312 monthly searches for cryptocurrency per 100,000 Australians in 2022—a remarkable 196% increase since 2020—demonstrates Australian enthusiasm for crypto. Despite encountering certain setbacks, Australia has emerged as a global leader in cryptocurrency adoption, affirming its role as the primary influencer in this swiftly evolving domain.
The survey indicates that 31% of Australians now see cryptocurrency as the future of online transactions, up by 3% from last year. Predictions suggest over 900,000 Aussies will join the crypto market next year, making up about a quarter of the population of crypto holders. This positive trend positions Australia as a global leader in adopting cryptocurrency.
Any Major Regulation Updates/Changes
In 2023, Bitcoin faced notable regulatory hurdles in its remarkable journey. Governments and regulatory bodies worldwide navigated the classification and regulation of cryptocurrencies. Bitcoin’s decentralised nature presented distinctive challenges, as it didn’t neatly align with conventional financial regulations. Regulatory updates include KYC/AML compliance, taxation, and consumer protection.
The regulatory landscape influenced Bitcoin’s price and market sentiment significantly. Announcements of regulatory crackdowns or positive developments could swiftly trigger price fluctuations, contributing to the inherent volatility of the cryptocurrency.
FTX Trial
The 2023 FTX trial, involving Sam Bankman-Fried, the founder of FTX, revealed a pivotal moment in the Australian crypto scene. Accused of diverting customer funds for various purposes, he was convicted on charges of fraud, embezzlement, and criminal conspiracy after a month-long trial. Accused of using $32 billion in customer deposits for personal gains, including covering losses at his hedge fund and making political contributions.
Bankman-Fried now faces a potential 110-year prison sentence, emphasising the significance of ethical practices in the evolving crypto landscape. This landmark outcome underscores the importance of robust oversight and ethical conduct in the Australian crypto industry, setting a precedent for similar cases in the future.
Binance Regulatory Issues And CEO Stepping Down
In 2023, Binance, a major player in the global crypto exchange scene, grappled with some genuine regulatory hurdles, marking a significant development in the crypto landscape.
Binance sorted out a deal with the Commodity Futures Trading Commission (CFTC) and the U.S. Treasury Department, mediated by the Justice Department (DoJ). This settlement addressed U.S. anti-money laundering and sanctions law violations. Since 2018, the CFTC, overseeing commodities and derivatives, including Bitcoin, had its eyes on Binance, investigating potential money laundering and sanctions breaches.
As it turns out, Binance moved at least $10 billion for entities attempting to evade U.S. sanctions. The consequence? Binance faced charges of purposefully evading U.S. law and failing to establish the right procedures to uncover terrorism financing and money laundering.
Confronting these challenges, Binance didn’t sit idle. It underwent some genuine changes, boosting its anti-money laundering investigation and analytics efforts and implementing strict know-your-customer (KYC) measures.
In November 2023, a significant moment unfolded in the Aussie crypto scene as Changpeng Zhao, or “CZ,” the founder and CEO of Binance, copped to money laundering violations. As part of a hefty deal with Aussie law enforcement and financial regulators, CZ also agreed to chuck in the towel as the top dog at the world’s biggest crypto exchange. Affectionately known as CZ, he’s also forking out a $50 million fine, with Binance shelling out a whopping $4.3 billion in fines as part of the bargain. The silver lining? The settlement green-lights Binance to keep on keeping on.
This settlement followed a string of probes into Binance for diverse legal infractions, including breaching anti-money laundering laws. The events leading to CZ’s stepping down were intricate, entangling various regulatory bodies like the DoJ and CFTC. Even with the storm swirling around CZ’s exit, Binance kept the wheels turning, business as usual, putting to rest worries about an FTX-style bank run.
After his resignation, Richard Teng, formerly Binance’s bigwig in Global Head of Regional Markets, stepped into the CEO’s shoes, packing a wealth of experience in financial services and regulation.
Ripple’s Legal Duel Against The SEC
In 2023, the legal clash between Ripple Labs Inc. and the U.S. Securities and Exchange Commission (SEC) wielded significant influence on the crypto market landscape, shaping the regulatory treatment of digital assets. U.S. District Judge Analisa Torres’ pivotal ruling determined that Ripple’s sales of the XRP token on public exchanges didn’t violate federal securities laws, marking a groundbreaking victory for a cryptocurrency company against the SEC. This decision prompted a surge in XRP’s value, indicating a positive market response.
Nonetheless, the SEC secured a partial victory, with the court deeming Ripple’s direct sales of XRP to sophisticated investors as unregistered securities sales. The ongoing legal saga, scheduled for a trial on April 23, 2024, holds implications not only for Ripple but also for the broader enforcement landscape against crypto exchanges and intermediaries, making it a crucial chapter in the year’s regulatory review in Australia.
Ethereum Highlights
In February, Ethereum (ETH-USD), the second-largest cryptocurrency, outperformed Bitcoin with a 1.6% increase, compared to Bitcoin’s 0.4% rise. On April 12, the Ethereum Shanghai Upgrade introduced a significant change, enabling the unprecedented ability to un-stake Ethereum. This allowed for the sale of assets and rewards that were previously locked, thereby enhancing liquidity and flexibility for stakeholders. Following the Ethereum Shanghai Upgrade, ETH reached a price level of $2,120.
Bitcoin Highlights, Bitcoin Halving, And What That Could Mean For BTC.
In June 2023, the SEC sued top crypto exchanges Coinbase and Binance, sparking uncertainty about the regulatory status of widely used coins. The market responded with a downturn, causing Bitcoin to drop to $25,558. A week later, the Federal Reserve temporarily maintained existing interest rates but hinted at two potential hikes before year-end. This led Bitcoin to dip below $25,000 for the first time since March.
However, by December, Bitcoin rebounded strongly, hitting over $44,000, a level unseen since April 2022, and securing a 150% YTD return. The resolution between Binance and the Australian Department of Home Affairs in November significantly impacted the regulatory landscape. Anticipation for the 2024 Bitcoin Halving also played a role in boosting confidence and interest in cryptocurrency.
The upcoming significant event in 2024 is Bitcoin’s halving, a process where the rewards for Bitcoin miners decrease by 50% every four years. Anticipated in April 2024, the reward for producing one block will decrease from 6.25 BTC to 3.125 BTC. Historically, the reduced supply of BTC is often viewed as a positive signal for its price, aligning with trends observed in previous halving events.
Top-Performing Cryptocurrencies
In 2023, cryptocurrencies had a stellar year. Bitcoin and Ethereum, leading the pack, yielded returns of over 155% and 90%, respectively. Notably, some top 100 crypto coins saw staggering increases, with certain tokens experiencing up to a 9600% surge. Beyond the dominant Bitcoin and Ethereum, other well-liked crypto tokens like Solana excelled, boasting a remarkable 965% return. Avalanche (266%), Cardano (147%), Polkadot (96%), Tron (95%), XRP (82%), BNB (31%), Dogecoin (30%), and Shiba Inu (30%) also stood out among the top-performing tokens.
Conclusion
Crypto’s wild ride in 2023 was a real rollercoaster of emotions and price swings. It vividly showed how cryptocurrencies can shake up traditional financial systems and grab the attention of Aussie investors. Looking ahead to 2024 and beyond, one thing’s for sure – the crypto journey is just getting started.
Despite hurdles like scalability and regulatory uncertainties, the overall scene suggests a promising path for blockchain’s future impact on global industries. As Aussie investors, it’s up to us to navigate this rollercoaster with a healthy dose of caution, resilience, and a focus on the long game.
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