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While cryptocurrency has risen in popularity over the years, unfortunately, some of the key cryptos in the market have lost value in 2022. Let’s review what happened and the projections for the crypto market going into 2023.
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Bitcoin and Ethereum Values Dropped Over 50% in 2022
Bitcoin value suffered a 65% drop in 2022. StatMuse reported that Bitcoin was at a value of $47,738.59 on January 1, 2022, which was a 3.3% increase compared to the previous day. Yahoo! Finance reported that the closing value for Bitcoin was 16,547.50 on December 31, 2022.
Ethereum withstood a 73% drop also in 2022. The cryptocurrency started the year off with a value of $3,769.70 at the close of the market day on January 1, 2022. The value of Ethereum was $1,196.77 at the close of the market on December 31, 2022.
The crypto market’s market capitalization was at its highest in November 2022 at more than $2.9 trillion in value. The market cap faltered to $798 billion by the last days of December 2022.
FTX Cryptocurrency Exchange Files Bankruptcy in November 2022
What worsened the drop in value of Bitcoin, Ethereum, and other cryptocurrencies in 2022 was the FTX cryptocurrency exchange filing for bankruptcy in November. They had to file for Chapter 11 bankruptcy because it owed money to over 100,000 creditors that have been helping to keep the company alive. The company’s assets and liabilities were between $10 billion and $50 billion.
As FTX continues the bankruptcy filing process, it may continue to lose some more of its partnerships. It already lost the partnership with GameStop which was selling FTX gift cards in its stores.
The Cryptocurrency Market Needs Increased Regulation
For the most part, the cryptocurrency market remains unregulated. This means that crypto investors engage in crypto trading at their risk without much protection if they lose their investment or if fraud occurs during a transaction.
Investors and blockchain specialists alike want the crypto market to have increased regulation, which is what the European Parliament was doing alongside the Council back in June 2022. Doing so will protect investors as they start to dabble in different crypto investments. Hence, the enhanced financial stability will make it possible for the crypto market to become more innovative.
Projections for the 2023 Crypto Market
Tim Draper believes that the Bitcoin value will go up to $250,000 by the middle of 2023. Right now, the Bitcoin value is about $20,840. While the FTX bankruptcy can continue to influence Bitcoin and other cryptocurrencies in a downward spiral, the Bitcoin bull expert is convinced that this crypto could get to be this high of a value anyway.
Mark Mobius is a well-known American investor. He thought that Bitcoin would go down to $10,000 in value in 2022, but it never got down that low. However, he still thinks that Bitcoin will get to this lowered value sometime in 2023.
Because of the FTX bankruptcy and the way inflation is soaring, Mobius may have a pretty good inference here. This means that he believes that Bitcoin will go down by at least 50% compared to its current value.
Where Do You Think the Crypto Market Will Go?
Do you believe that 2023 will be another year of the crypto market dipping by high percentages amongst popular cryptos and stablecoins? Or do you think the crypto market will have a huge recovery from the losses that it suffered in 2022? Leave your opinion in the comments!
*This article was paid for. The Cryptonomist did not write the article or test the platform.
