The year 2022 was a turbulent one for the cryptocurrency market. According to the crypto market behaviour analytics platform Santiment, 2022 has arguably solidified the thesis that news events impact the space.
Santiment notes four news events that influenced and continue to influence crypto market participants. These include the pandemic, FTX and SBF, interest rates, and the Russia-Ukraine tensions. According to Santiment, traders are watching these events. As fear, uncertainty, and doubt (FUD) on the topics ease, crypto prices will likely rise.
Two of these events — the Russia-Ukraine geopolitical tensions and interest rate hikes — have been at play for much of the year. Russia launched an attack on Ukraine back in February. According to a CNBC report at the time, the entire crypto market slipped as the tensions between the two countries mounted.
Similarly, the market has responded to several Federal Reserve interest rate hikes. The latest 0.5 percentage points rate hike was implemented earlier this month. It was followed by the price of Bitcoin (BTC) rising above $18,000 on the announcement before dropping again.
The collapse of FTX last month and the criminal case against Sam Bankman-Fried have had similar effects on market sentiments.
Overall, Bitcoin, the benchmark cryptocurrency, lost 60% of its value in 2022. BTC currently trades at around $16,560, down 0.43% in the last 24 hours. The wider crypto market capitalization also shrunk by $1.4 trillion from the start of the year. Reuters’ analyst opines that 2023 may still be tough for the crypto market as the global market could face a recession.
Regardless, crypto market participants continue to be optimistic for 2023. Anthony Georgiades, the co-founder of the Pastel Network blockchain, told Reuters that it is hard not to be optimistic going into 2023, especially for projects like Ethereum. His optimism is tied to Ethereum finally completing the Merge upgrade that will be the foundation of further improvements in 2023.
“This event was a technological feat and one of the lone positive events in a year that otherwise has been rather dark for crypto. These upgrades will make the Ethereum ecosystem far easier to use for people all around the world. Because of all this progress, it’s hard not to be a crypto optimist going into 2023,” he said.