As bad as it was for Bitcoin and Ethereum in 2022, it was bad for other speculative altcoins.
While the bear market is raging, altcoins aren’t where investors likely want them to be, and this predicament isn’t about to change anytime soon. Many altcoins face an uphill battle for legitimacy during the bull market, a task that has now proven more difficult with less liquidity in the market.
Until Bitcoin and Ethereum recover, altcoins will continue their downtrend. And much like bear cycles of days gone by, many will cease to exist altogether.
Stablecoins present an even more interesting case for 2023.
Crypto exchange Binance delisted several stablecoins in September, including USD Coin (USDC), the fifth-largest cryptocurrency with a market cap of $58 billion ($43 billion). Circle, the creator of USDC, announced shortly thereafter that they would launch a euro-backed stablecoin on Solana (SOL) in the first half of 2023.
Some analysts are predicting that the competition could get even fiercer in the near future. This is due to the growing number of US government-sponsored stablecoin projects known as central bank digital currencies (CBDCs).
Canada announced in November 2022 that it would launch a consultation on crypto, stablecoins and CBDCs. The Bank of Japan is testing a rollout at major banks in early 2023. Turkey even announced plans to launch a stablecoin next year, and many more countries are said to be doing the same. One of them stands far above the others: China.
So far, China’s CBDC development has been limited to local areas, but next year that could change with a broader adjustment.
For current stablecoin issuers like Tether (USDT), Circle, and Binance, this means competition is intensifying.
“Stablecoins are in a really tough spot as there is no question that the emergence of CBDCs will eat up their market,” said Richard Gardner, CEO of fintech firm Modulus Global.
The stablecoin market is just as unpredictable as Bitcoin price predictions. Ethereum or any other cryptocurrency.
One thing is certain: Risk in the crypto space remains elevated.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.