2022 has been a very active year for the cryptocurrency markets. The market was shaken by the US Federal Reserve's (FED) interest rate moves. It led to the collapse of cryptocurrency platforms, which we thought to be giants, and the bankruptcy of crypto companies.
Bitcoin has lost nearly 75% since it hit an all-time high of around $69000 in November 2021. Since then, 2 trillion dollars has exited the entire crypto money market.
Bitcoin has lost 64% since the beginning of 2022. Bitcoin, which started the year at the level of $ 46000, saw the highest levels of $ 55000 in 2022 and the lowest levels of $ 15400. The leading crypto currency was at $ 16000 in the last week of the year.
BTC Price Chart
Ethereum, which has the highest transaction volume in the market after Bitcoin, also suffered a great loss. Starting the year at the level of $3600, Ethereum lost 66% to its investor this year.
On the other hand, losses were harsh in leading cryptocurrencies such as Solana (SOL), Dogecoin (DOGE), Cardano (ADA), Ripple (XRP). Since the beginning of the year, Solana has lost 93%, Dogecoin 58%, Cardano 70% and Ripple 58%.
ETH Price Chart
The collapse of the cryptocurrency markets in 2022; It started in May with the collapse of UST, a “stablecoin” that should be indexed to the US dollar. With the collateral problems of UST, the stablecoin of the Luna community, $1 = 1 UST. This was followed by the reset of Terra Luna, one of the largest coins in the world. This collapse caused big losses to investors who own both cryptocurrencies.
The collapse in Terra Luna also caused some companies to go bankrupt. Three Arrows Capital, a cryptocurrency fund, went into liquidation and filed for bankruptcy due to the collapse of UST assets. This was followed by the bankruptcies of crypto lending companies Celsius and Voyager.
By November, news from FTX, one of the world's largest cryptocurrency exchanges, hit the market like a bombshell. The news that started when the collateral of Alameda Research, a subsidiary of FTX, was revealed to be empty, resulted in the company's bankruptcy. Following these developments, FTX founder Sam Bankman Fried was arrested in the Bahamas in December on fraud charges and is expected to be extradited to the United States.
All these events deeply shook investor confidence. The cryptocurrency market has lost hundreds of billions of dollars in days.
Investors have had to contend with crypto-specific failures in 2022 as well as interest rate hikes that put pressure on risky assets.
Fed has aggressively raised interest rates repeatedly throughout 2022 to combat high inflation. The move in question caused recession concerns both in the US and other countries ...
Fast-growing technology companies were also adversely affected by this situation. The shares of these companies suffered heavy losses in the stock market. The tech-heavy Nasdaq index fell 33% in 2022.
The fluctuations in Bitcoin continued in parallel with the price movements of the US stock indices in the first half of the year. However, the catastrophic bankruptcy of FTX following the Luna collapse caused the crypto market to diverge negatively from the US stock markets, and Bitcoin-led cryptocurrencies are on track to close 2022 with a heavy loss.
So what awaits us in 2023 …?
I think that the regulation expectations for cryptocurrencies in 2023 will be high. Countries may make critical decisions about crypto regulation in 2023, but here in the US, behavior will be decisive. We will see this together...
As I wrote in my previous articles; In 2022, there was a correlation between cryptocurrency markets and traditional markets like never before. In the short term; I stated that it would be for the adoption of cryptocurrencies, but it would be a problem in the long run. We are experiencing this right now. This correlation has started to make the cryptocurrency markets no longer an alternative…
My Last Words; If there will be a rise in cryptocurrencies in 2023, certain conditions must be met. At the beginning of these; Sorting out the rotten apples in the cryptocurrency markets … We, the investors, have a big task here. Secondly; The separation of cryptocurrencies from traditional markets with alternatives … I still do not understand; Why are the cryptocurrency markets, which are alternatives to traditional markets, in correlation … !!!
After these are formed, they recover in Bitcoin and Ethereum … Then 50X, 100X in altcoins is not a dream …
As I always say; Listen to everyone, Decide for yourself...