1. Bitcoin Leads the Rally Amid ETF Narrative
Bitcoin emerged as one of 2023's top-performing assets, surging over 160% and outperforming traditional assets even on a risk-adjusted basis. Its price action unfolded in three phases: an early rebound from cycle lows, mid-year stagnation, and a year-end rally fueled by spot Bitcoin ETF optimism.
A fake ETF approval tweet in October acted as a catalyst, propelling Bitcoin from $28K to nearly $45K. Despite mid-year dullness, Bitcoin recorded the second-highest Sharpe ratio among major assets, trailing only AI-driven NVIDIA.
👉 Why Bitcoin ETFs are a game-changer
2. Binance’s Turbulent Year Ends on a Positive Note
Binance began 2023 dominating 70% of centralized exchange spot trading but faced a 50% market share drop after ending zero-fee promotions. Regulatory blows included:
- CFTC charges (March)
- SEC lawsuit (June)
- $4B DOJ settlement (November)
Despite penalties, the resolution allowed Binance to continue operations, reassuring markets.
3. The Persistent "Alameda Gap"
Post-FTX collapse, 1% market depth remains 50% below pre-crash levels. Liquidity hasn’t fully recovered due to cautious market makers and institutional losses.
4. Rising Liquidity Concentration
Top 8 exchanges now hold:
- 91.7% of market depth
- 89.9% of trading volume
While consolidation reduces volatility, it creates systemic risks (e.g., FTX’s fallout).
5. Bitcoin’s Declining Correlation With Traditional Assets
BTC decoupled from macro trends in H2 2023, rallying despite equities hitting record highs.
👉 How Bitcoin’s independence shapes portfolios
6. Solana’s Remarkable Comeback
SOL/ETH price ratio jumped from 0.01 to 0.03, driven by successful airdrops (PYTH, JTO) and revived network activity post-FTX.
7. Stablecoin Peg Instability
USDC depegged during March’s banking crisis, while USDT traded at a discount in summer. True "depegs" were rarer than perceived.
8. FTX Asset Recovery Surge
SOL’s rally boosted FTX’s holdings, improving creditor repayment prospects. Liquidity for FTX-linked tokens rose, minimizing future sell pressure.
9. Curve Finance’s Crisis of Confidence
Challenges included:
- Founder’s $60M USDT loan backed by CRV (June)
- $70M hack (August)
Despite repayments, liquidity remains below historic highs.
10. StETH Liquidity Drought
Lido’s stETH dominance raised decentralization concerns, while secondary market liquidity dwindled post-Shapella.
FAQ Section
Q1: Why did Bitcoin rally in Q4 2023?
A1: Spot ETF speculation and institutional demand drove the surge.
Q2: How did Binance regain stability?
A2: The DOJ settlement removed existential uncertainty, though SEC litigation continues.
Q3: Is Solana’s recovery sustainable?
A3: Network upgrades and developer adoption will determine long-term viability.
Q4: What caused stablecoin depegs?
A4: Banking crises (USDC) and supply-demand imbalances (USDT).
Q5: Will FTX creditors get full repayments?
A5: Rising crypto valuations have improved recovery odds significantly.