2022 is the year to forget about cryptocurrencies, including Bitcoin. There was a lot going on in the cryptocurrency market. It was a game of less ups and downs of great proportions. The last month of the year was quiet without much price movement due to low volatility. 2023 is a new year and market watchers want to know what lies ahead.
FTX, one of the largest exchanges, collapsed in 2022. The founder was arrested and extradited. This has led to renewed calls for better regulation in the cryptocurrency environment.
Among the many things that negatively affected Bitcoin prices, the fall of FTX was probably the worst. Bitcoin’s value hit a two-year low below $15,600 in November. In December, a certain stabilization was observed with an increase of 1%. Bitcoin price chart has been volatile in 2022. Another thing that affects cryptocurrencies, including Bitcoin, quite badly is rising interest rates.
It was a chaotic year for cryptocurrencies, but the climax came in November. FTX, a cryptocurrency once worth $32 billion, filed for bankruptcy. FTX founder Sam Bankman-Fried was arrested in the Bahamas. The US SEC (Securities and Exchange Commission) filed a civil fraud suit against Bankman-Fried for allegedly using funds from FTX to support a hedge fund. More fraud charges have been filed against him.
Things happened so fast that people were afraid of the cryptocurrency ecosystem. But people have now realized that everything that happened was due to fraud. They will gain new interest and confidence in the cryptocurrency ecosystem. They realized that the crash was not due to the inherent weakness of cryptocurrencies. The sudden collapse caused by the bankruptcy and failure of FTX is not something that will end the era of cryptocurrencies.
Other notable events in the cryptocurrency market in December
FTX’s collapse sparked more fears when another cryptocurrency exchange, BlockFi, filed for bankruptcy protection. The trigger was that one of the popular cryptocurrency exchanges called Binance experienced a mind-boggling exit of $6 billion in just three days in the first days of December.
Fears continued to grow when accounting firm Mazars retracted one of its reports on Binance stocks from its website. The firm has announced that it has stopped working for cryptocurrency-related companies. Binance is in the process of fixing this problem. They applied to many institutions to get a report on their reserves. The data will help reassure investors about the crypto industry’s resilience during these challenging times.
On the growing call for better regulation of the cryptocurrency market
The US government is closely monitoring developments in the cryptocurrency market. The collapse of FTX prompted the Biden administration to call a session where they want to discuss increased regulations on cryptocurrencies.
The unregulated nature of cryptocurrencies has made them so popular. Blockchain, DeFi and everything else that makes people interested in the unique and unregulated nature of cryptocurrencies has led many to invest in them. However, this massive FTX drop has people wondering about the rules.
2023 and the price of cryptocurrencies including Bitcoin
If we look at the performance of cryptocurrencies in 2022, we can say that it has been extremely bad. 2018 is the worst year for tools. Investors are optimistic that 2023 will be a better year for Bitcoin. In 2019, the market rebounded after 2018’s dismal show. People are expecting the same this year as well. One factor that could help exchanges make more money from rising Bitcoin prices is lower interest rates. Some analysts think it could regain the $30,000 price range or more this year. There is a positive outlook for many analysts and investors.
But some believe that 2023 will continue the same way. The main concern remains insolvency and liquidity problems from continued interest rate hikes to control inflation. Such analysts have some dark predictions that Bitcoin may fall further and fall into the $5,000 range. Although Bitcoin has been around for 14 years, many blockchains and applications are relatively new. These are still in development, which can lead to slow growth of the cryptocurrency.
The McClatchy newsroom and editorial staff were not involved in the creation of this content.