This article reviews the eventful year of 2023 in the cryptocurrency market. Readers of Dynamic Zone, how was your 2023? Regardless, we have all emerged strong from the market turmoil of 2022, and Dynamic Zone just wants to say, “You’ve worked hard this year.”
(Background:
Spot ETF approved, Bitcoin may fall! CryptoQuant: BTC retreats to $32,000, investors and miners profit-taking
)
(Background:
Bitcoin to reach $250,000 in 2024! Silicon Valley venture capitalist Tim Draper: BTC’s potential is comparable to Microsoft
)
Table of Contents
The emergence of the Bitcoin Ordinals protocol
US bank collapse, USDC unpegging
PEPE, the legendary meme coin!
SEC regulation: “Cryptocurrencies are unregistered securities”
Taiwan’s “VASP Guidelines” come into effect, special law passes first reading
Friend.tech ignites the SocialFi trend
The explosion of text-based coins on various chains
Conclusion
Looking back at 2023, investors in the cryptocurrency market slowly woke up from the collapse of FTX. This year’s journey began in a haze as investors started to regain their lost faith and see the light in the market.
“Every day in the crypto world is like ten years in the human world.” This year, the cryptocurrency market has experienced many twists and challenges, and Dynamic Zone has always stood by its readers/investors. Let’s review the exciting year of 2023 together!
The Emergence of the Bitcoin Ordinals Protocol
On January 21, software engineer Casey Rodarmor officially unveiled the protocol “Ordinals” on the Bitcoin mainnet. This protocol allows users to create unique NFTs on the smallest unit of Bitcoin, Satoshi (SAT), marking the beginning of Bitcoin’s ecological explosion this year.
Shortly after the introduction of the Ordinals protocol, Domo developed a new token standard called BRC-20 based on the protocol. BRC-20 facilitates token issuance and transfer by writing text on Satoshis. At that time, no exchanges supported BRC-20, and it had to be minted through self-hosted nodes. The word “text” was imprinted on the entire year of 2023 from that moment.
Further reading:
Bitcoin NFT Frenzy: Ordinals surpasses 10,000 tokens! Consumes over half of the Bitcoin block space
Against the backdrop of a global tightening of interest rates, Silicon Valley Bank collapsed due to a liquidity crisis caused by selling off bonds. On the evening of March 10 (Taiwan time), before the US stock market officially opened, Silicon Valley Bank suspended trading and announced its bankruptcy and takeover by the Federal Deposit Insurance Corporation (FDIC). What caused panic in the cryptocurrency community was the announcement by Circle, the issuer of the second-largest stablecoin USDC, that there were still $3.3 billion in exposure at Silicon Valley Bank.
The scar of FTX’s bankruptcy still ached, and the community quickly became concerned that Circle might not be able to recover its reserves, triggering a sell-off of USDC. According to Coingecko data, the price dropped to a low of around $0.878 at around 4 p.m. on the 11th, marking the most severe unpegging event in USDC’s history.
In addition, DAI, a decentralized overcollateralized stablecoin issued by MakerDAO, also experienced panic selling because nearly 40% of the collateral was USDC. It briefly dropped to $0.886.
USDC experienced severe unpegging
After US government intervention, the community also realized that there were no major vulnerabilities in Circle’s reserves. USDC gradually restored its peg to $1 after March 13.
Further reading:
Silicon Valley Bank Collapses in 36 Hours: Fed Raises Rates, Sells US Bonds, USDC Unpegging Crisis
In early April, PEPE, the legendary meme coin, entered the cryptocurrency market. Within just four days, it skyrocketed and increased over a thousand times in value. PEPE broke new highs every day, and after being listed on the cryptocurrency exchange Binance on May 6, it reached a historic high of $0.00000431, with a market cap exceeding $1.5 billion, making it the 43rd largest cryptocurrency.
PEPE’s strong surge in April and May led the entire meme coin market. Meme coins such as $TURBO, $POGAI, $FLOKI, $AIDOGE, etc., emerged one after another. All internet memes rose with the trend, and the overall market entered a magical state. At the same time, many legendary fortunes were made by early investors, earning thousands or even tens of thousands of times their initial investment.
Further reading:
Pepe Frog’s Market Cap Exceeds $1.5 Billion: Whale Buys for $263, Becomes $13 Million, and Profits 50,000x!
It is worth mentioning that I wrote an article about PEPE meme coins on April 18, becoming one of the first Chinese media outlets to report on it. Unfortunately, I didn’t invest, which is why I’m here writing the year-end review in poverty.
Moving forward to mid-2023, on June 5, Binance was sued by the U.S. Securities and Exchange Commission (SEC), accusing it of violating 13 securities laws. The lawsuit also mentioned various tokens such as SOL, ADA, MATIC, FIL, etc., as unregistered securities.
The market experienced the first holiday after the “regulatory crackdown,” and all altcoins plummeted. MATIC fell 19%, SOL fell 17%, ADA fell 16%, FIL fell 22%, SAND fell 19%, according to Coingecko data.
Further reading:
Market Collapse! Bitcoin Flash Crash, SEC Securities Coins All Fall Over 20%: ADA, SUI, AVAX, OP, TON…
At that time, the cryptocurrency market was concerned that Coinbase, Kraken, and other U.S. trading platforms would have to decide whether to delist these tokens as regulations became stricter. Market makers in the U.S. would also be affected and might have to stop market-making for tokens classified as securities. However, quickly thereafter, Ripple and the SEC had a major update on their legal battle over whether XRP tokens were securities. On July, Judge Analisa Torres made a summary judgment, ruling in favor of Ripple and stating that Ripple’s sale of XRP through exchanges did not constitute a security.
This ruling directly weakened the SEC’s claim that almost “all tokens are securities.” Investors began to reevaluate the potential value and risks of various tokens in the market, rather than categorizing them all as securities.
In terms of cryptocurrency regulation in Taiwan, there were significant developments this year. In September, Taiwan officially released the “Management Guidelines for Virtual Asset Service Providers (VASPs)” and the guild preparatory group was also officially established that month.
Further reading:
Taiwan’s Financial Supervisory Commission Officially Releases “VASP Guidelines”! Taiwan’s Top 10 Regulatory Focus: Ban on Stablecoins, Derivatives, Requires Bank Trust…
On the other hand, Taiwan’s first special law on virtual assets, jointly proposed by legislators Jiang Yongchang, Guo Guowen, and Chung Chia-pin, received its first reading in the Legislative Yuan on October 27. According to Jiang Yongchang’s office, there is no timetable for the second reading of the bill, but it may not be possible to proceed before the end of January 2024. Although legislator Tseng Ming-tsung has temporarily expressed a tendency not to pass the bill, this draft law is still a significant step for Taiwan’s cryptocurrency market.
Further reading:
Major! Taiwan’s Cryptocurrency Special Law Passes First Reading in Legislative Yuan
In early August, cryptocurrency exchange Coinbase launched Base, an L2 chain built on Optimism technology. After its launch, the total value locked (TVL) and the number of users continued to soar. It is worth mentioning that the reason for the rapid growth of the Base chain’s ecosystem was closely related to the popularity of the decentralized social platform friend.tech.
Further reading:
What is friend.tech? How to obtain an invitation code? The decentralized social platform that fueled the growth of the Base ecosystem
The popularity of friend.tech continued until mid-October, and various testnets on different chains were launched. Over the course of three months, the user base of friend.tech grew to 830,000, and the TVL reached a peak of $51 million. The considerable trading volume has brought $23.84 million in revenue to the protocol. On October 15, the platform reached its highest daily active user count, with 73,794 active users.
However, on November 12, the once-leading “SocialFi” platform friend.tech quickly cooled down, with only 1,623 active users left, a 97% drop. This made the market start to question what the true nature of the so-called “SocialFi products” was.
Further reading:
Friend.tech’s Active Users Plunge 97% in November, New Features Rejected, SocialFi Trend Reaches Turning Point?
On November 7, Binance announced the official listing of Ordinals (ORDI), including trading pairs such as ORDI/BTC, ORDI/USDT, and ORDI/TRY. Due to the listing of ORDI on Binance and the subsequent skyrocketing price, concept tokens in the BRC-20 sector also surged. In the blink of an eye, six months have passed, and the text-based coin racecourse has experienced the “second spring.”
Further reading:
Ordinals (ORDI) Listed on Binance Surges Above $14! BRC-20 Concept Tokens Soar Across the Board
As the enthusiasm for text-based Bitcoin continued to overflow, major public chains such as ETH, BNB, AVAX, SOL, TIA, etc., also ignited the text-based frenzy. The “cost-effective, high-volume, fair launch” text-based racecourse has reached new heights. It feels like revisiting the Layer1 moment every day, and it is also a period of pressure testing for major public chains.
Further reading:
Text-based “Paralyzes Multiple Public Chains,” Ordinals’ Celebration Can Last How Long?
Although most of the text-based projects released on various chains are based on memes, developers have not stopped building the ecosystem during this half-year. In this spring, we have seen the completion of projects related to text-based infrastructure, including wallets, cross-chain solutions, trading markets, minting tools, data indexing, etc. From this, we can infer that the third spring may be waiting for the text-based market.
This article reviews the eventful year of 2023 in the cryptocurrency market. Dynamic Zone readers, did you personally participate in the major events of 2023 mentioned above? We hope you can avoid pitfalls and consistently profit, growing together with the community on the path of investment and learning.
For the first half of next year, we can look forward to Bitcoin spot ETFs, the Cancun upgrade, global interest rate cuts, and more. The cryptocurrency market changes rapidly, and the only constant is continuous learning and building during bear markets, while reaping rewards during bull markets. We hope the charm of blockchain remains eternal, and we meet at the peak!
Related Articles
Looking Back at the “Wealth Moments” Missed in the 2023 Bear Market: What Lessons Can We Learn?
Reasons Behind Ordi’s Price Surge? Community Speculates Binance Wallet to Launch BRC-20 Text-Based Sector, Officially Debunked
Year of the Dragon Concept Coins: Besides “$Silly,” What Other Meme Coins and Text-Based Projects Have Dragon Elements?
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friend.tech
Ordinals
pepe
SEC
USDC unpegging
VASP guidelines
Bitcoin
Text-based