Crypto Markets 2023 will be to differentiate or die for investors

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A sign stating that Bitcoin is going to the moon is seen in the exhibition hall during the Bitcoin… [+] Conference 2022 at the Miami Beach Convention Center on April 8, 2022. Bitcoin looked good then. It has since collapsed. Now what? (Photo by Marco Bello/Getty Images)

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Crypto investors have taken it on the chin this year. Will next year be better? What are market participants and new blockchain startups excited about for 2023, especially after lessons learned from the Terra Luna and FTX disasters?

Senior Forbes contributor Clem Chambers, who regularly writes about the cryptocurrency markets, said 2022 was bitcoin time Wile E. Coyote likening him to the cartoon character with a penchant for falling off cliffs.

“In general, I think the first half of 2023 will be the best time to enter the market, says Alex Andryunin, CEO of Gotbit in Portugal. We are actively investing in a large cryptocurrency sector and have more than 700 coins in our hedge fund portfolio, but none exceed 2% of total capital.For 2023, you differentiate, or you die, he says.

Gotbit manages the markets of some 280 tokens from all sectors. Decentralized finance projects are seeing inflows because investors believe DeFi is the answer to centralized exchanges, of which FTX was one of the largest in the US. Other areas are not so hot.

GameFi is bad, believe me, says Andryunin. Startups that have not released any products are in the best position. They were able to raise capital and are preparing to expand in the second half. But most of the existing GameFi projects in our portfolio suffered massive losses. They don’t have a working model for their token, he says.

Coins to buy in 2023 Ethereum are among them, says Gotbit from Portugal. (Photo by STR/NurPhoto via Getty … [+] Pictures)

NurPhoto via Getty Images

Gotbits favorite crypto wallet looks like this: 15% bitcoin, 15% EthereumETH, 10% Binance, 10% PolygonMATIC, 5% each for Chainlink, CardanoADA, NEARNEAR protocol, PolkadotDOT, FilecoinFIL, Uniswap, CosmosATOM , CronosCRO and AptosAPTOS. They also like the new Sui permissionless layer 1 blockchain, but it is not yet available for investors.

They are bearish on LitecoinLTC, Stella Lumens, Eos and MoneroXMR. I wouldn’t recommend investing more than 1% of your crypto portfolio in them, warns Andryunin from his Lisbon office a few days before Christmas.

Daniela Prez, CMO of Moonland, a multi-channel, multi-player social metaverse game run by a company called Meta Studios in Miramar, Florida, thinks GameFi survives 2203. Blockchain company Qtum chose Moornland in November to be its foray into metaverse space. .

I think a lot of projects gave (blockchain-based) games a bad name because they took advantage of a hot market and didn’t deliver what they promised, she says, without naming any nouns.

Axie Infinity, a one-time GameFi darling, is trading around $7 as 2022 draws to a close. It started the year at $93.

There are tons of projects that are creating amazing products and thinking long-term and how they can impact the industry and not just be a quick cash grab, Perez says. For us, we know how long it takes to create a good game experience. You can’t be surprised when tons of game projects fail, especially when they promise to create the best game in six months.

Add to that the fact that only a small number of gamers play games on a blockchain. Most gamers still play on the PlayStation and X Box consoles which have been popular since the 1980s.

Perez said his company believes GameFi tokens will see a turnaround in 2023. In fact, if some of them don’t, they’ll be down 100% in just over 12 months.

Gaming is just gaming, even if new games are on a blockchain, Perez says. It is a booming industry. Just invest what you can afford to lose.

MORE FROM FORBESWorld’s Richest Crypto and Blockchain Billionaires 2022By John Hyatt 2022: It’s been a terrible year

This year has been a mess for crypto investors. Those who bought new coins in January 2022 lost almost everything. This is especially true for alt-coins. BitcoinBTC is down over 60%. Cardano is down 80%. Sandbox, a GameFi token, is down 92%.

FTX’s collapse in November is always a headwind for cryptocurrency investors. The sentiment is pretty bad, with the government breathing down the necks of bitcoins. In a world where anything goes now, so does crypto. The consensus has been that the government will never succeed in punishing bitcoin in particular, but is TetherUSDT the next disaster that will annoy governments just enough to tackle bitcoin ownership and exchanges, who knows? Investors would be wise to assume the continuation of the crypto winter to begin 2023.

Bitcoin is still the best of the bunch. Here it is compared to Ethereum, Cardano and Axie Infinity… [+] in 2022 ending on December 21.

Yahoo! Finance

Another negative is that many crypto projects, venture capital funds like Sequoia Capital, and some pure-play cryptocurrency investment firms have kept cash accounts on the FTX exchange. Now uncertainty awaits them all. People in the industry expect more digging through the rubble of FTX early next year. The worse the title, the more the crypto drops.

The collapse of FTX and the failure of Terra Networks stablecoins in 2022 are two sides of the same coin: liars, leverage and lending.

I remember TerrasLUNA3’s business model was vigorously criticized in the community long before it finally collapsed, says Ruslan Sharov, founder of Cheelee, a new GameFi platform that rewards users for watching short video streams .

Many investors have seen the oddly high growth rate of FTX, and last summer, when FTX was actively investing in dubious crypto projects, many in the community predicted that they would go bankrupt and the whole of the market would collapse.

It collapsed and did not recover from this sale in early November. Bitcoin is down nearly 20% since bad FTX headlines started rolling in on Nov. 8.

FTX’s trading arm, Alameda Research, was suspected of market manipulation even before the Luna fiasco. A hedge fund or two announced it, bringing it to the mainstream on Twitter late financial twit. Criticism of a potential FTX drop was nowhere to be found on Bloomberg or CNBC until it all fell apart. Now its founder, Sam Bankman Fried, is awaiting trial after freeing himself on $250 million bail, which should not be confused with the amount he actually paid. (It was much less, a Coindesk writer calculated.)

In April 2022, the Moscow-created WavesWAVES blockchain accused Alameda Research of deliberately dumping its coins. The FTX and Luna crashes are the cryptocurrency market’s natural healing from scammers and unsustainable business models, Sharov says. Experienced investors take advantage of this complex situation.

For Sharov, if he had $10,000 to burn in crypto, I would invest most of it in new Web3 projects, he says, quoting his own company, of course. The rest I would put in bitcoin.

The misspelling of the word “hold” has become a mainstay of cryptocurrency jargon. Investors seem… [+] hold onto bitcoin, despite the more than 60% hits it took in 2022.

gettyJust HODL Bitcoin, instead

From portfolio diversity to throwing all your eggs in one basket, Alex Reinhardt, a German entrepreneur and investor behind an Asian app called Elvn and new blockchain startup PLC Ultima says he loves bitcoin in 2023.

I would just invest in one piece, he said. Bitcoin. There are many coins and various blockchains in the crypto market. The industry is growing every year. But if we talk about the future, bitcoin has it. I would invest $10,000 in bitcoin and wait a few years for the next bull cycle.

Most alternative coins follow bitcoin. If bitcoin is down, others are often even more so. But if bitcoin wins, there is a chance that riskier alternatives will outperform. This is where diversification comes in. For crypto, it works more on the upside. When you hold a lot of different coins plus bitcoins, when bitcoin goes down, the rest of the portfolio goes down even more (barring very sophisticated and expensive hedging strategies).

I think only a handful of coins have a future, says Reinhardt. It’s hard to predict what will work well in the long run.

This year ended with a notable trend. Due to the FTX debacle, bitcoin investors withdrew their crypto holdings from centralized exchanges like Coinbase and moved them into hard wallets.

According to a report from BanklessTimes.com, 88% of all year-end bitcoin volume was off exchanges, a 3-year high. The move signals a potential shift in investor sentiment away from centralized exchanges and could indicate greater confidence in bitcoin as investors continue to hold rather than cash out their tokens.

Investors will be hard-pressed to find someone who has given up on crypto altogether. There are not a lot. Yet, investing in crypto is not like investing in stocks. These are not Polkadot actions. It’s the equivalent of a high-risk venture capital investment in a start-up, topped with a mixture of Russian roulette, where the wheel is sometimes rigged. Investor protections do not exist.

MORE FROM FORBESFTX Failure Reminds Investors: Crypto Investor Protection Doesn’t ExistBy Kenneth Rapoza

Like the term hodl, the phrase bitcoin moon is just that – a combination of cute words that define a community of techies and scoundrels, greedy investors and thrill seekers.

Bitcoin may have already landed on the moon and is spiraling down to earth, for better or for worse.

Alas, for crypto investors (or gamers, if you want to call them that), the New Year has always been a time for making wishes and setting goals. So to that, on the moon in 2023.

* The writer owns bitcoins and owns tokens from Cardano, Polkadot, and Stella lumens mentioned in this article.

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