The cryptocurrency market had one of the worst years in its existence in 2022. Following the crypto boom in 2020 and 2021 that sent tokens to all-time-high value, all other cryptocurrencies saw major losses in the past year, mostly influenced by governments raising interest rates in order to tame inflation and a potential recession after the Covid crisis affected the world economy.
Bitcoin opened up the year on a 1.2% percent increase. According to CoinMarketcap, the world’s most valuable cryptocurrency jumped from $16,554 on December 31st to $16,749 on January 2nd.
After reaching the $16,700 margin, BTC has been trading sideways, showing clear signs of stagnation for the past couple of days.
One thing to note is that BTC’s trading volume tumbled as investors stopped trading during the end-of-the-year celebrations. The 24-hour trading volume for bitcoin went down from $15 billion on December 29 to $9 billion on January 1st.
What Can Be Expected From BTC in 2023?
The past year was incredibly harsh on cryptocurrencies all around. Aside from the aforementioned post-pandemic interest crisis, Bitcoin and other currencies also had to deal with the collapse of the cryptocurrency exchange FTX, which caused a major crisis on the market and sent BTC down from $21,000 to less than $15,500 in its worst period.
In all likelihood, 2023 will be a far better year for cryptocurrencies. The U.S. Securities and Exchange Commission is already showing signs of a decrease in interest rates. With interest decreasing, investing assets like crypto or stock become less risky, creating an open field for major investors to return to the market.
On top of that, Bitcoin has a major event scheduled for 2024. At that date, bitcoin will go through its “halving” process.
When this happens, the rewards for mining bitcoin are cut in half. That procedure happens in order to maintain the scarcity of the token, and by that battle inflation.
Taking the year prior to a bitcoin halving as an example, 2023 can be a very valuable year for bitcoin. In the months prior to the previous halvings, BTC has always picked up significant gains.
