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The year 2022 was turbulent for the cryptocurrency market. According to crypto market behavior analysis platform Santiment, 2022 has arguably solidified the thesis that news events impact space.
Santiment points to four news events that influenced and continue to influence crypto market participants. These include the pandemic, FTX and SBF, interest rates, and Russia-Ukraine tensions. According to Santiment, traders are keeping an eye on these events. As fear, uncertainty, and doubt (FUD) on issues subside, cryptocurrency prices are likely to rise.
Two of these events, geopolitical tensions between Russia and Ukraine and interest rate hikes, have been in play for much of the year. Russia launched an attack on Ukraine in February. According to a CNBC report at the time, the entire crypto market crashed as tensions escalated between the two countries.
Similarly, the market has responded to several rate hikes by the Federal Reserve. The last 0.5 percentage point rate hike was implemented earlier this month. It was followed by the price of Bitcoin (BTC) rising above $18,000 at the announcement before falling again.
The FTX collapse last month and the criminal case against Sam Bankman-Fried have had similar effects on market sentiment.
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Overall, Bitcoin, the benchmark cryptocurrency, lost 60% of its value in 2022. BTC is currently trading around $16,560, down 0.43% in the last 24 hours. The broader crypto market capitalization is also down by $1.4 trillion since the start of the year. Reuters analyst opinion that 2023 may still be difficult for the crypto market, as the global market could face a recession.
Regardless, crypto market participants remain bullish on 2023. Anthony Georgiades, co-founder of the Pastel Network blockchain, told Reuters that it's hard not to be bullish on 2023, especially for projects like Ethereum. His optimism is tied to Ethereum finally completing the Merge upgrade that will be the basis for further improvements in 2023.
โThis event was a technological feat and one of the only positive events in an otherwise pretty dark year for cryptocurrencies. These updates will make the Ethereum ecosystem much easier to use for people around the world. Given all this progress, it's hard not to be a crypto bullish going into 2023,โ he said.
