ionicXBT
patreon
15) 2023 Outlook.
🕑 Added 2023-01-11 16:54:59 +0000 UTC2022 has been an AWFUL year for crypto, the financial markets, and the broad economy.
But it has been one hell of a year for LEARNING.
This was the year many of you lost, which was NEEDED.
Why?
If you did not LOSE then you would have CONTINUED thinking you knew what you were doing, only to lose a BIGGER amount later on.
Learning must come first, chase KNOWLEDGE then the money follows.
You are LUCKY to be learning here, other people are doing it wrong.
-
-
I'm not going to tell you predictions that have NO BENEFIT to you.
I have seen people state BASIC facts like saying UNEMPLOYMENT rate is going to rise.
Or predicting that INDIA is going to have a higher POPULATION than China in 2023.
Even though I AGREE and is TRUE, there needs to be predictions that you can PROFIT off.
You are NOT here to prove a point, but to be PROFITABLE.
This is one of the reasons why I DISLIKE politics or history debates, as most times it serves no purpose in HELPING YOU increase your networth.
Here's what I see happening in 2023.
-
US DOLLAR WEAKENS
DXY - is the US dollar index, which tracks the price of the US dollar against other currencies. The DXY rises when USD gains strength against the other currencies and falls when the dollar weakens.
Last year the USD was relatively STRONGER because the other currencies were in a WEAKER position.
Japan had NOT increased its interest rates, while the European currencies were affected by the Russia and Ukraine conflict.
We will come more to that later on.
-
First understand that,
A FALL in the DXY is BULLISH for crypto.
How do we know this?
Let's take a look at 2022.
2022 was a good year for the US DOLLAR.
The FED Quantitative Tightening worked to INCREASE the value of the US dollar.
Quantitative Tightening - the process whereby a central bank sells its accumulated assets (mainly bonds) in order to reduce the supply of money circulating in the economy.
In other words, the FED was selling assets and raising interest rates (QT) in order to try and INCREASE the value of the US dollar.
This as we saw caused a DECLINE in crypto throughout the whole year of 2022.
This is because the DXY is INVERSLEY correlated with crypto.
It does the OPPOSITE of Bitcoin.
-
One thing you need to understand is that Bitcoin, like other commodities, is priced in USD.
In order to hold BTC, it must be purchased using USD.
When the USD is stronger, the demand for USD is more because of the returns to investors.
They will liquidate assets to hold USD during an economic downturn.
That is why there are lots of liquidations of crypto and stocks when DXY rises.
During a STRONG economy, however, investors BUY up assets like BTC and leave USD.
-
-
The EVIDENCE of this was in December when the Central 'Bank of Japan' BOJ decided it was time for them to TIGHTEN up their currency.
Thus COMPETING with the USD.
For so long BOJ managed a very LOW-interest rate. As a result, the Yen rate has been LOWER than the US dollar.
But they started to change their plan by allowing the rate to go OVER 0.5% from the previous 0.25%.
It isn’t exactly QT yet, but it shows them getting started.
This was the sudden announcement that shot the VALUE of the Yen UP against US dollars.
Crypto pumped too that day (but NOT SP500.)
What does this tell us?
-
The devaluation of the US dollar is always BULLISH for crypto.
If BOJ (and other countries) decide to unload its US foreign reserves to get the cash to prop up their OWN currency, that won’t be good for the US and USD.
But it will be good for CRYPTO.
Remember that Japan and China are the LARGEST holders of US debt or what we call the TREASURY BILL.
A sudden supply flood of bonds would pressure the US FED to pivot ie relax and stop raising interest rates.
Or else the price of bonds goes lower while yield remains high, due to high-interest rates.
Which would not be good for the FED as they do not want to give HIGH yield returns for CHEAP bonds.
So I expect 2023 to have a significant devaluation of USD and here is where crypto would swoop in.
When the number 1 fiat (USD) is WEAKENED, crypto will RISE.
I have a feeling that it will start happening this year
-
-
GOLD & SILVER
These two will be a GREAT leading performing ASSET for 2023.
Bitcoin will be in a recovery stage whilst GOLD and SILVER will rise to new all time highs.
Gold underperformed in 2022 due to factors such as the STRONG US dollar.
This was driven by the Federal Reserve's aggressive actions by Fed raising interest rates (rate hikes and quantitative tightening).
In 2023, there are different reasons to suggest gold and silver industry WILL BE successful investments.
One of them is that central banks PURCHASES have been INCREASING, especially CHINA.
This is a HUGE indication.
Central banks around the world, particularly in China, Turkey, and India, have been buying gold at a RECORD pace recently.
They have been INCREASING their gold reserves in recent years as a way to diversify their foreign exchange holdings and REDUCE RELIANCE on the U.S. dollar.
Central banks buy gold because its seems to be a SAFER assets during these times due to rising inflation.
As the chart BELOW shows that in 2020 when BTC bottomed no one was buying GOLD as you could get BETTER RETURNS returns else where e.g Bitcoin.
But as Bitcoin recovers, Gold and silver will RALLY.
-
Just like BTC, Gold and silver must be bought with USD in most cases.
So if the USD value loses or DXY declines we can see a surge in Gold prices along with silver.
I believe Silver will actually OUTPEFORM Gold, but BOTH will do well in 2023.
And as mentioned previously it is likely that the US dollar will WEAKEN.
The Federal Reserve has been increasing interest rates at the fastest pace in recent history.
But it is expected to pivot AND stop raising interests.
Lower interest rates are generally seen as POSITIVE for gold prices, as they reduce the opportunity cost of holding gold (which does not pay interest) and make it more ATTRACTIVE to investors.
When interest rates are LOW, investors may be more likely to purchase gold as a SAFE haven asset, which can drive up the price of gold.
I believe the dollar is likely to remain strong in the early part of next year, but it is expected to depreciate during the second half of 2023.
As market participants wait for the possibility of monetary policy easing in the US, i believe the DOLLAR will start to weaken in mid-2023.
Meaning I anticipate Gold will start to rise mid 2023 to all time highs.
-
-
CRYPTO
Crypto 2023 is about survival.
Lower inflation, possible truce in Russia, easing energy concerns and Fed stopping rate hikes will likely power the starts of the new bull market.
Also China will play a HUGE part.
Yes, China.
China just removed covid-19 restrictions and I expect the Chinese economy to BOUNCE back.
This COUPLED with the Bank of Japan increasing interest rates AS WELL AS the Bitcoin halving suggests that the BULL RUN is well on its way.
But projects without real utility will NOT last and the WEAK will not survive shown by 2022.
2023 crypto is about getting READY for our industry’s next LEADERS.
Some of them we can see already, such as WINTERMUTE.
This a crypto market maker who partner with the world's best crypto exchanges and projects to provide LIQUIDITY.
They just announced the possibility of creating their OWN EXCHANGE filling the gap left by FTX and other bankrupts centralised entities.
Meanwhile, projects that are just about surviving are trying to to STRENGTHEN its root i.e. Binance acquiring Voyager and Tokocrypto.
-
Most crypto are LAYER 1 or LAYER 2.
Layer 1 - is a project that has its OWN base blockchain (e.g., Bitcoin or Ethereum)
Layer 2- is a third-party project that is being built ON TOP of that blockchain
The hunt to find the BEST layer 1 blockchain that can provide fast, scalable transactions WITH low fees is still on.
But in 2023 the Layer 1 project i believe which will outperform is COSMOS ($ATOM)
Cosmos will fill the gap Solana left being the next Ethereum killer.
It’s on route with the modularity thesis as one of the crypto future.
Look at the chart below which shows the daily transactions for COSMOS.
You can see the RESILIENCE that the network has shown DESPITE the bear market conditions.
These metrics are correlated with the ORGANIC and FAIR growth that we've recently seen which show increase in INTERESR and activity.
Definitely a project you SHOULD keep your eyes on.
-
-
REGULATION
Ever since Luna crashed, we’ve been experiencing a string of billion dollar crypto project COLLAPSES.
Crypto exchanges, crypto lenders, crypto brokers, you name it, it’s tanked.
From Celsius to FTX to BlockFi, these massive “can’t possibly fail” projects failing is maybe in the long run GOOD for crypto.
Thanks to FTX collapse expect some regulation.
Crypto has been fighting regulation for as long as its EXISTENCE.
FTX will only give reasons for regulators to be unfavorable toward crypto. We’re going to see the effect of regulations more because of them.
With regulation you must be prepared for CBDC.
This is the digital currency issued by the central bank - Central Bank Digital Currency
It may not happen this year but its good to be PREPARED.
-
The PROBLEM with most peoples portfolio is that they are not REKT PROOF.
If regulation arrives and CBDC are implemented most people will LOSE their net worth.
But what do we do different?
We hold coins that play in our FAVOUR if this happens.
Always be a step ahead.
MONERO is real privacy, everyone will run to it once CBDC arrives.
Another coin is LITECOIN.
These are projects that are safe and will survive, not just any coin.
I will give more detail on why I am BULLISH on these next time.
But do some RESEARCH and YOU will see why.
-
-
Mainstream Adoption
Crypto 2023 is about survival.
The projects that will be SURVIVE are those that work with BRANDS as this will be the real driver of mainstream adoption.
This year we’ll see more COLLABORATIONS as business continue to test the potential of web3.
So look for projects that have PARTNERSHIPS with successful businesses in the real world.
There will be weaker market participants who FAIL to gain enough traction to scale and they will DIE while others explode into mainstream relevance.
It’s an exciting time.
You’ll see more partnerships between brand AND blockchain businesses. They’ll bring the customers, and we’ll bring the technology.
Utility is going to be the defining factor for crypto. Without it, all you have are catalysts on which to SPECULATE.
Hence why I like ZILLIQA and Constellation, as they have been UNDERVALUED for too long.
They will have its time.
Yes, there are going to be coins that do multiple X number of returns, for example TDROP.
A token on the THETA Network which i believe will have significant returns come next bull market.
A low market cap coin with a huge utility which is not even on Binance or kucoin (why on post number 9)
These coins that do exponential returns usually come with a narrative or trend behind them like DEFI or NFT.
2023 trends or sectors that will happen are Artificial intelligence, Privacy and security coins, web 3.0/metaverse gaming.
Follow the TRENDS.
There are MORE projects that will reveal when the TIME is right.
-
-
BITCOIN
I mentioned previously that 2023 will be a much better year than 2022 for crypto.
That is actually a pretty SAFE statement since it really cant get much worse than last year.
in 2022 BTC fell 75%.
In theory, BTC would have to fall more than 75% in 2023 to be considered as a worse year.
That suggests BTC falling way below $3000, which is UNLIKELY.
So then we can already see why 2023 will be a better year.
Bottom indicators are usually detected by an ABUNDANCE of FEAR articles and news.
Were seeing a lot more of them, including "crushing regulations" type content.
The only thing left for crypto is CAPITULATION.
What is capitulation?
It is the point when investors throw in the towel and SELL their investments.
Capitulation is also the point when markets hit rock BOTTOM.
It is shown by a QUICK wick down which lasts couple days.
Make sure your HERE as the closer we get to it the more we will smell it.
I will ALERT you all.
That could occur from around $12,000.
Also notice on the higher time frame (MONTHLY)
The LOWER HIGH has not been formed.
So in 2023 a lower high to $40,000 is be expected, but it is too early to say.
Never the less be prepared for the RECOVERY.
-
You should be doing anything necessary to get CAPITAL ready to deploy, as the last thing you want to have is REGRET.
Do not have the idea that $100 in your account to buy the BTC bottom is enough.
Do not waste your time.
You need CAPITAL to invest.
MAKE money, SAVE the money, then INVEST the money.
It is better to get a 10% return on $1000 than 100% return on $50.
Investing is the cherry on top.
@ionicXBT
Comments
Even though late in 2023, still flagged some of the coins you mentioned. Good stuff.... thanks
great market report... :-D
