Of Amy Castor and David Gerhard
With all these gutted crypto buyers, there are plenty of handy divination guts just lying around. So it’s time to channel our inner Maren Altman and see what the blockchain tells us in 2023!
Our predictions for 2022 were correct on almost everything – except when we underestimated the power of human stupidity.
* within acceptable error limits
How we did in 2022
These were David’s predictions, though he didn’t stick his neck out very much:
- Bitcoin: “Think of the dumbest thing you could possibly do. No, dumber than that.” We’re pointing to all crypto since May 2022 to show how right it has been.
- Actual dollars in the crypto system were already running out by the end of 2021. The bubble burst in May and retail went home.
- Miners were already stuck with unsellable bitcoins. Our August article outlining the collapse of US bitcoin mining continues to play out as we described.
- Cryptocurrency is still made out of donkeys to actually use, but that would never change.
- No one has managed to invent a more silly new magic bean than NFTs. Human stupidity, you failed us!
These were Amy’s predictions:
- “Bitcoin has not yet suffered a massive crash, but the conditions are ripe for a crash – loose regulatory oversight and a lack of real dollars in the system.” The great crash, when it finally came, played out even more spectacularly than anyone imagined could imagine from us.
- After growing 388% in 2021, stablecoin companies would feel the heat from regulators. TerraUSD imploded in May, and US Treasury Secretary Janet Yellen had to explain Terra-Luna to Congress the day after it collapsed – promising more regulation on the spot. The October report from the Financial Stability Oversight Council (FSOC) is uncompromising.
- NFTs have been the brightest new crypto handles of 2021 – but all crypto handles have a finite lifespan. Crypto bros would have to come up with a new way to attract dumb money. But they couldn’t do that in 2022. They lured some with mining but that was the last dumb money.
- Regulators would tighten the noose on the NFT market. In May, the SEC announced that it would double the size of its Crypto Assets and Cyber Unit to focus on NFTs, as well as DeFi, stablecoins and exchanges. [SEC; Bloomberg] In June, the DOJ indicted Nate Chastain, a former OpenSea executive, in the first NFT insider trading case. In October, we learned that the SEC was investigating Yuga Labs to determine if Bored Ape Yacht Club NFTs themselves — as well as ApeCoin — are unregistered securities offerings.
What’s next – our predictions for 2023!
Everything that began in May 2022 when Terra Luna exploded has yet to come to an end. None of this is over yet. Crypto companies don’t have real money, and they all know it – everyone is already thoroughly screwed. In 2023 we will see them all turning upside down one by one. FTX’s fall will continue to ruin those who still thought they were solvent.
The crypto industry is a bunch of drunks supporting each other and delaying full collapse for as long as possible in hopes that a miracle will save them. Crypto companies will continue to buy up smaller companies to plug holes in their accounts – bigger and bigger shells to hide the pea word.
Investigations by FTX and Celsius Network will continue to unearth shocking discoveries of the kind made public after the QuadrigaCX collapse. Even worse than we’ve seen so far.
Either Binance or Tether will likely go under in 2023. Rather Binance. (But we figured Tether would definitely be down by December 2017.)
The same people who created FTX ex nihilo will try to create another crypto futures exchange from scratch to replace FTX. Laundromats need to wash. Wintermute was announced for the position, but they might even be better than the FTX crew.
Bitcoin price keeps falling. We don’t see any potential new buyers putting real dollars into the system any time soon.
The Pax dollar (including Binance USD) and USDC stablecoins — which are backed by the only actual dollars in the cryptosystem — are likely to be significantly drained in 2023. This may or may not be done in an orderly manner.
US banks, which saw great opportunity in the somewhat cream-colored cash market, are under scrutiny by regulators and are likely to face extreme restrictions or even shut down.
The remaining positive public perception of cryptocurrency has been completely shattered and will remain so. “The future of finance” is increasingly associated with scams, scams, and amateur scammers like Sam Bankman-Fried.
The public is pissed and lawmakers are pissed. Regulators are grabbing their chance to act while they can. The SEC will be more aggressive in its enforcement actions – pretty much every token on DeFi is and always has been an unregistered penny stock under US rules. The CFTC and the Justice Department have already started making arrests for shenanigans in the DeFi market, such as the arrest of Avi Eisenberg just after Christmas. Market manipulation has always been illegal – but the laws are finally being enforced.
Crypto still hasn’t come up with anything more stupid than NFTs. But you know they’ll keep trying.
Image: British newspaper astrologer Mystic Meg has never — as far as we can find — made predictions about anything as dumb as cryptocurrency.