Why 2023 might be a good year for the crypto world.

Why 2023 might be a good year for the crypto world.

With Bitcoin surging 40% in January 2023 is off to a tremendous start. The good news, however, extends beyond simply Bitcoin, since this price gain has impacted the whole crypto verse. The amount of money made from mining increased by $22.66 million in January, while the average stock price of companies involved in the cryptocurrency industry increased by double. Venture capital investments are down 23% from the previous month despite this encouraging news.

With a rise of roughly 40% in January, bitcoin saw its greatest monthly price performance since October 2021. Cryptocurrency and stock prices started to decline after benefitting from a Consumer Price Index report in December 2022 that indicated inflation was moderating, as retail data fell short of forecasts and profits dropped. All eyes were on the Federal Open Market Committee meeting on February 1 as BTC’s price reached a multi-month high of $23,920 on January 29. The FOMC increased its benchmark interest rate by 25 basis points that day, citing lowering but still rising inflation. Around $23,000, BTC had little fluctuation, indicating that the news was already taken into account.

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Centralized exchange inflows and outflows stabilized in January as BTC acquired bullish momentum. Following the FTX crash in November 2022, there was the highest monthly outflow of coins ever recorded, which reached 200,000 BTC/month across all exchanges. With a decline in the strong outflow trend indicating investors are returning to the cryptocurrency market, the net flows are currently more or less neutral. For the first time in more than a year, BTC’s bullish month smashed past its 50-, 100-, and 200-day moving averages, with investor cohorts returning to profitability after being decimated in 2022.

As Bitcoin’s price began to soar in early 2023, a number of altcoins, including Gala, Aptos, Threshold (T), and Decentraland’s MANA, had monthly growth rates of 100% or more. This resulted from the overabundance of short positions by the end of 2022 and the excessive domination of negative sentiment. The Solana-based protocol Friktion still declared a stop to deposits owing to the “difficult market for DeFi in the next months,” implying that there may be another recession on the horizon.

Following the trajectory of 2022, other occurrences in a darker realm of vulnerabilities and hacks proceeded at the same time. In particular, the story of Avraham Eisenberg is developing as Mango Markets is suing the hacker for $47 million in damages for his $117 million attack in October 2022. Recently, there have been multiple instances of stolen money being transferred inside the sector.

Author: Bobby Parker