Where Bitcoin goes, other tokens follow. In 2022 they all walked into the crypto winter. Apart from that, we’ll remember last year for the collapse of one of the world’s largest crypto exchanges, the transition of some major projects from mining to staking and the pressure of the regulatory authorities. But let’s see how Bitcoin made it through 2022.
Short answer: not well. BTC market cap on January 1, 2022 totaled $902.10B, whilst on the same day of 2023 it became $319.24B. If Bitcoin was to post its year-end results on Instagram like many of us do, it would have to admit that it fell 64% from peak. Since reaching its all-time high in November 2021, BTC has been on a wild ride throughout 2022, and the coin finished the year with value above $15,000.
Bitcoin market cap in 2022
One of the main drivers of the decline appeared at the very beginning of the year with the arrival of the new policy from the US Federal Reserve. On January 6, Bitcoin hit a local low of $42,500, dragging the rest of the market with it. But that was just the start — further Fed decisions sent BTC well below $18,000.
Another anti-record of the year was set in June, when the miners’ cash flow went down 80% from its peak – to levels from two years ago. The same month, public companies in the industry for the first time ever sold more cryptocurrency than they mined. Followed by several loud bankruptcies, it undermined the trust of crypto investors, leading to – guess what? – yep, more decline.
Although crypto-haters (as usual) foresee the downfall of Bitcoin, there is space for hope. Such as the anticipated halving – when every four years the reward for Bitcoin mining is cut in half. As we can see from historical data, this process increases the BTC value: fewer coins remain and potential miners drop out. The next halving is expected in spring 2024. But before that, be prepared for a rally. Though, after 2022 we might reconsider what we call a rally. The year once again proved that BTC is stable enough to survive turbulent events at a global scale and will no doubt stay the biggest contributor to the total crypto market cap.
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