2022 was widely regarded as a prolonged CRYPTO WINTER, with high-profile collapses of the Terra/Luna ecosystem, FTX, and many others sending shockwaves through the industry. More than $2 trillion was liquidated from the total crypto market cap all-time high since November 2021.
Bitcoin lost more than 60% in 2022, its second-worst annual performance on record, and only its third down year ever. Other cryptocurrencies also suffered, with Ether losing about 70%, and an index of the 100 largest coins dropping roughly 65%.
Exactly one year ago, the global trade volume for the 24-hour period was approximately $70.48 billion. Today’s 24-hour volume worldwide is 67.43% less at $22.95 billion, highlighting the massive drop in activity and positive sentiments within the time period.
At the time of writing, the crypto market cap is marginally up in the last 24 hours to stand at $798 billion. The 24-hour trading volume is down by 7% to stand at $17.91 billion.
What you should know
There’s a growing consensus that 2023 will hold great macroeconomic woes.
The International Monetary Fund (IMF) has warned that 2023 will be a tougher year for most of the world economy because the U.S., EU, and Chinese economies are all slowing down simultaneously. The IMF’s managing director Kristalina Georgieva stated “We expect one-third of the world economy to be in recession … Even countries that are not in recession, it would feel like a recession for hundreds of millions of people.” This isn’t going to be music to investors’ ears.
The following could shape the destiny of crypto and other asset classes in 2023:
- The ongoing war in Ukraine.
- Covid-19 in China.
- Central Bank rate hikes, especially the US Fed.
- The implosion of new ecosystems and platforms within crypto, or further contagion from developing situations such as the FTX collapse.
- Crypto-centric regulations and wider investment-focused regulations.
Investors should be looking to navigate this minefield of circumstances to ensure a profitable year.