Over the past year, cryptocurrencies investor have been put to the test. Most cryptocurrency prices have fallen by double digits, and the FTX bust has severely shaken confidence in the industry. While crypto traders remain hopeful that things will improve in 2023, it is clear that this trust has been broken somewhat. Let’s examine why this trust was broken.
Governments Push for Regulation.
With the state often viewing cryptocurrencies suspiciously, Bitcoin and other digital assets are typically accused of facilitating money laundering or even financing terrorism. Although the crypto sector currently lacks clear regulation, governmental authorities may seek to impose strict rules within just two years. According to Laura Shin from CoinDesk, “2023 could be a major turning point with proposals for intense cryptocurrency regulations – and it is likely that the cryptocurrency community will resist any components which challenge decentralization”.
Cryptocurrencies Market Is Still Struggling.
As we know, 2022 was a very turbulent time for crypto investors. Cas Piancey, co-host of the “Crypto Critics’ Corner” podcast, wants people to expect the worse. As he states: “It’s impossible to ignore a financial crisis caused by bad business partnerships and decisions. We should expect funds to collapse, and companies that we don’t anticipate will fluctuate – all because the contagion has grown too large with its impacts being near incalculable.” Despite this, there is a huge room for growth.
Departure from the Crypto Sector.
Due to the recent crash of the FTX exchange, the crisis in Terra (LUNA) and the general market downturn, many large companies and institutions are explaining that they are withdrawing their support from crypto or ending their sponsorship. The Miami Heat is very close to ending its sponsorship with FTX, according to the Miami Herald. At the same time, there is also the possibility that the crypto ads that are shown during the SuperBowl will no longer be shown.