The cryptocurrency market didn’t perform well in 2022. More than $2 trillion was lost from the total cryptocurrency market cap. In early November, Bitcoin dropped from around $69,000 to $15,599.
According to Kadena Eco CEO Francesco Melpignano, the current weakness in the cryptocurrency market will continue into 2023. He noted that the continued emergence of multiple crises could cause the economy and Bitcoin to suffer even further. Due to the recent interest rate increases and inflation, the market will take some time to recover.
The lack of regulation and the uncertainty surrounding the cryptocurrency market are some factors that prevented it from growing. This is why most institutional investors stay out of the crypto space.
Crypto winter is not welcome, but it provides an opportunity to clear the market’s clutter and focus on still viable projects. Melpignano said the 2022 crypto winter would help pave the way for the industry to flourish. These hardships will expose the bad apples in the market and allow crypto to perform its intended function.
Bitcoin in 2023
There are various speculations about Bitcoin’s potential performance in 2023. One of these is whether or not the market will wait until the Bitcoin halving before experiencing a significant bullish move.
Despite the optimism surrounding Bitcoin’s potential recovery, the market will still remain under pressure due to the grim 2022 global economy. Many investors are still reluctant to get back into the crypto space.
Dr. Youwei Yang of BTCM noted that the current weakness in the market could cause Bitcoin to drop to around $13,000 in the first half of 2023. He noted that the various factors that could cause a crash in the cryptocurrency market include a large crypto miner going bankrupt, a centralization of the industry and security issues.
According to Dr. Yang, the ongoing developments involving the collapse of FTX and the ongoing campaign against Binance demonstrate the high risk of further decline.
While various regulatory developments are currently taking shape in the cryptocurrency industry, they could delay significant moves in the market. Regardless, Dr. Yang said that the Bitcoin halving could be a potential bullish catalyst in May 2024.