After the end of the “cryptocurrency winter”… What are the most important predictions for Bitcoin in 2023?
Cryptocurrencies have shown violent fluctuations throughout the year 2022, amidst storms from the Federal Reserve and high interest rates, and the fall of major companies in the cryptocurrency market, so much so that experts have dubbed the past year “the year of the cryptocurrency winter”.
The year 2023 brings with it hopes for investors to recover, especially with the slow pace of interest rate hikes, as well as tough laws to be enacted by central banks. To retool the industry, what are the most important factors affecting the cryptocurrency market in 2022 and what are the most important expectations for the new year?
cheap money
With the onset of the Corona pandemic at the end of 2019, passing through health care closures in most countries of the world in the first months of 2020, central banks, led by the Federal Bank, started pumping in trillions of dollars in the form of unemployment benefits for those affected by health care shutdowns and with the influx of “cheap money” – soft credit – into markets and low interest rates, stock markets rebounded – especially tech stocks – in addition to the bitcoin price reaching nearly $70,000 twice during 2021.
And with the beginning of 2022 Bitcoin opened the year’s transactions, above the $40,000 levels, reaching its peak last March; Breaking the $45,000 barrier.
Federal Bank
With the start of the Federal Reserve’s first monetary policy tightening last March, cryptocurrencies entered a downward trajectory, with the cost of borrowing rising; Subsequently, many crises follow and the pain of the market increases.
In mid-May, the first signs of a crisis appeared on the market. When the stable currency “Tira”, which should be supported by the US dollar, was disturbed, it was disturbed, and its value fell below the stable level of one dollar; Losing about 70% of its value in just a few days, and this led to the collapse of its currency, “Luna”, which was one of the top 10 digital currencies in the cryptocurrency market, by more than 95%.
This has increased the violent decline that the largest currency in the digital currency market, “Bitcoin”, has entered. To reach up to $29,000 by the end of May.
This was followed by the collapse of many companies operating in the sector. Where the “Three Arrows Capital” fund failed at the end of May 2022, as well as the “Voyager Digital” fund, which was the largest lender of the first company.
Business bankruptcy
Bitcoin then continued in a tight range; As the Federal Reserve has continued to raise interest rates; the drop in the price of currency, in the order of 25 thousand dollars, and the bankruptcy of many other companies due to the high cost of loans; Cryptocurrencies have continued their narrow range.
And at the end of 2022 – precisely in November – the “FTX” platform went bankrupt, the main lender of the bankrupt companies in the sector.
And with its failure; Many companies have also filed for bankruptcy. FTX has been the savior for struggling companies in the cryptocurrency industry, which has added to the suffering of the industry.
All of this drove Bitcoin down from the $21,000-per-unit range; Reach the $15,000 limit by the end of the year.
Total cryptocurrency losses in 2022 amount to approximately $1.4 trillion; This is due to the sharp decline in Bitcoin.
And compared to the currency’s record highs in 2021; We find that total losses exceeded $2 trillion at the end of 2022, with Bitcoin down 62% during the same year.
Cryptocurrency predictions in 2023
The expectations of major financial institutions and leading market analysts ranged between positive and negative. Standard Chartered Bank predicted that the price of bitcoin would reach $5,000, while the most optimistic, billionaire Tim Draper, predicted $250,000.
between this and that; JPMorgan estimates that the largest currency in the cryptocurrency market will reach $13,000, while Deutsche Bank expects bitcoin to reach $28,000.
While the chief technology officer of “Tether”, Paolo Ardoino, predicted that the value of a unit of bitcoin would be around $50,000, while Anthony Trenchev, CEO of “Nexo” said that there is a possibility that bitcoin could reach $100,000.
