How Much Has the Crypto Market Shrunk in 2023?

2022 was a difficult year for Bitcoin. With several major crypto exchanges collapsing, rumors of crypto regulation, and banks going bust, it’s no wonder that traders in 2023 were feeling hesitant to invest in crypto.

For a long time, we could see crypto going down hard and fast. Luckily, as the end of the year approaches, there is an overall improvement in the Bitcoin price. As a result, many other coins are benefiting from this positive sentiment.

Today, we’ll explore the reasons behind these severe price fluctuations, and as we are about to say goodbye to 2023 very soon, we want to reflect on crypto prices from the past few months.

The Crypto Crash of 2022 in Under 2 Minutes

For those who missed some of the biggest news in the crypto sector, 2022 was arguably the worst year for digital assets. Many industry experts refer to it as the “2022 crypto winter.” Exactly a year ago, the major crypto exchange FTX went bankrupt after its SEO Sam Berkman-Fried was accused of money and wire fraud.

His trial is still ongoing, but according to several news resources, Berkman will soon be charged. The FTX collapse previously discouraged investors from joining the crypto space, but this recent news has had the opposite effect.

In addition to FTX, 2022 saw the collapse of two prominent crypto assets, Terra and Luna, which also contributed to crypto going down. These stablecoins pegged to the US dollar suffered immense price declines due to the US recession and, as a result, decided to unpeg, losing their worth. This cost the crypto market over 500 billion in assets.

The next reason for crypto going down in 2022 was the action of the European Central Bank, which is working on regulating the crypto markets. These changes caused many investors to back out of the market, reflecting their concerns that crypto will no longer be a DeFi currency. As 2023 is drawing to a close, we are seeing another type of trader join the scene: those who were previously hesitant to join the market due to its unregulated status.

Lastly, the SEC has filed lawsuits against other popular exchanges, Binance and Coinbase. According to the Securities and Exchange Commission, Binance is an unregistered and unlicensed exchange, while the dispute with Coinbase is centred around how crypto assets should be accounted for.

All the negative media coverage is what drives investors away from the market. As a result, it drives prices down, causing the market to shrink even further.

The Factors That Affect Crypto Prices

The price of a cryptocurrency can be influenced by numerous things. As you can see, negative market sentiment has an adverse effect on crypto. Here are other factors that influence its price:

Supply and Demand: The more desire there is for an asset, the more precious it becomes, causing prices to rise.
Market Sentiment: The bad perception of cryptocurrency by the public has the potential to alter the level of demand for these assets. Unfavourable media coverage can drive customers away, while positive news can bring in more traders.
Regulatory Factors: Laws have a mixed effect on the cryptocurrency market; while some crypto investors are glad that it will soon be regulated, others are vehemently opposed, backing out of their investments, which can result in crypto going down.
World Economy: Increases in interest rates, bank failures, and inflation are all detrimental to digital assets.
Market Liquidity: Stable prices are achieved when a greater number of people invest in crypto.

As you can see, many of the above factors interplayed in 2022, causing a decline in Bitcoin holdings and other assets. All these are also what affects the stock market. But if we had to give specific numbers, how much has Bitcoin lost during 2022?

Let’s Talk Numbers: How Much Have Markets Shrunk?

For the first time since May 2022, Bitcoin (BTC) crossed over $35,000 in October this year. In comparison, BTC’s lowest point was around $17,000 in June 2022. As of December 1, 2023, Bitcoin’s price is over $38,000 and is seeing a daily increase.

This resonates with some financial expert’s predictions, which prognose that Bitcoin will peak at $40,000 by the end of 2023. It’s certainly looking like December will be a dynamic month for crypto fans. Of course, BTC still has a long way to go if it wants to surpass its all-time high of $68,789.63.

What about the overall crypto market cap? Well, the global crypto market size in 2022 was 4.7 billion, whereas this year, industry experts project it will reach $1.6 trillion. So perhaps the question we should be asking isn’t how much is crypto going down, but how much is crypto going to rise?

Is It Worth Investing in Bitcoin?

Are you seeking some crypto investment advice about whether you should buy Bitcoin? Know that this answer will vary from investor to investor. Despite Bitcoin’s rough start at the beginning of the year, we can see the effects of the crypto crash slowly dispersing. The latest reports by the Wall Street Journal and Forbes show that its prices are gradually recovering. So, if you are looking to invest in this asset, ask yourself the following questions:

Are you comfortable investing in one of the most expensive digital assets?
Are you patient? Bitcoin is a long-term investment.
As an investor, you should be prepared to do your own research. Do you have the time to dedicate to this task?

If the answer to the above is yes, then Bitcoin will likely be a suitable investment choice for you. But if you are looking for other major cryptocurrencies that double as budget-friendly options, there is a huge market to consider. Your overall portfolio can consist of minor coins and tokens and a few popular assets in the sector.

It’s also worth noting this isn’t the first hurdle the market has seen. We saw crypto going down in 2022 and gradually rising in 2023. If anything, crypto proves time and time again that it’s full of potential. In fact, this industry continues to expand into other sectors, including healthcare and logistics. Thus, there are plenty of reasons for us to remain optimistic about the Bitcoin market’s overall future.

Where To Buy Bitcoin in 2023

Currently, many traders are seeking alternatives to crypto exchanges, putting their trust in broker-matching services. We can’t blame them. With the rising number of court cases against major crypto trading platforms, investors need to be careful who they entrust with their money. In the next few paragraphs, we will recommend some safe places for buying and selling digital assets. Additionally, we will also provide a short guide so newbie investors can begin trading as soon as possible.

Select a Brokerage or Exchange

A cryptocurrency broker can be your best option if you’re interested in investing in Bitcoin but don’t know where to start. Brokers can help you learn the ropes and will answer all your questions. If you’re not sure where to start, look for a reputable broker in your area using a platform like Immediate BitMasters. This broker matching site allows you to register for free and will find you a suitable broker in seconds.

On the other hand, you could also choose an exchange. Just make sure to avoid centralised exchanges like the aforementioned Coinbase and Binance. There are plenty of DeFi alternatives that will give you full control over your assets. If we had to pick one, we recommend that you try Uniswap. With a trading volume of 1.5 trillion, it’s one of the most trusted DeFi protocols currently available.

Add Funds

Now that you have picked an exchange or brokerage you are satisfied with, it’s time to select a payment method and add your capital. You may need to wait a little before the platform approves your deposit.

Meanwhile, you can begin researching the top coins and tokens to invest in. There are many crypto strategies you can consider that will help you make the most of your investment. Consider spreading the volatility risk by investing in multiple coins rather than putting all your eggs in one basket.

3) Buy Crypto

Once your payment is approved, it’s time to build your own portfolio. Make use of your research and pick a suitable strategy that will fit your investment goals. You can work together with a broker to find the best possible tactic. Alternatively, you can also make use of crypto trading bots, which have become widely popular among modern-day crypto traders.

Final Thoughts: Is Crypto Going Down or Rising High in 2024?

Despite going through a crypto winter, it seems like the worst is over for digital assets. We and many crypto analysts believe there is still a lot of hope for Bitcoin and plenty of room to make a profit. The fear of crypto going down may finally be over.

Prices have started to balance, and we are seeing a gradual increase that was also present just before the 2021 peak. Alongside all this, the Bitcoin halving event is coming up in April 2024, which always creates positive sentiment in the sector. We might even hope for a bull run in the upcoming year.

Undoubtedly, all we can do right now is speculate. Nobody can forecast with any degree of accuracy how Bitcoin and other cryptocurrencies will fare in the future.

Still, we and many others hold hope and are ready to embark on a thrilling (and possibly turbulent) adventure in the crypto market.