There is no question that 2022 was a rough year for cryptos. But as 2023 rolls in the signs are looking extremely encouraging. Bitcoin, widely seen as the strongest crypto in the world, has so far managed to briefly top $23,100. This is the first time that the amount has been achieved since August 2019, seeming to indicate that a recovery is well and truly underway. Looking at it another way the crypto has gained an exceptional 39% over the course of January 2023, certainly painting the picture of a positive Bitcoin outlook.
It also isn’t just Bitcoin futures that are looking bright. A number of other coins have also shown strong signs of recovery, including Ether. Ranked as the second biggest cryptocurrency, Ether has also rallied over the course of January. A high of $1,664 has been achieved so far, the highest since November 2022.
With the Bitcoin outlook finally seeming to have turned a corner, traders are cautiously starting to ask if the worst is now behind us. But before giving the all clear it’s important to first understand what caused the crypto crash in the first place. What caused the sudden dip, has it all really passed, and is it really time to breathe a sigh of relief?
The trouble all started in 2022 when various central banks began to slash interest rates. The move, although not entirely unpredictable given the world health crisis, came as a shock to many investors. Especially investors that had their money in riskier assets. Of course, stocks and and even the best crypto coins in particular are seen as high risk ventures.
In order to protect their assets risk focused investors began to pull out of crypto and reinvest in safer options. Hence, the crypto market experienced a troubling 2022. Tech stocks and capital-backed start-ups also suffered, with NASDAQ having seen a catastrophic period.
But, indeed, it seems as if the worst may now be behind us. Inflation seems to be slowing, and some are even saying that a rates slash may be on the cards. Experts have suggested that the Fed will cut rates at some point in 2023, a move that would do wonders for the world economy. Which is to say; a rate cut in 2023 isn’t guaranteed, but seems very likely.
CEO of CryptoCompare, Charles Hayter, shared his thoughts on the situation. He explained that there seems to be less risk of inflation going into 2023. He added that central banks are likely to be far more cautious of additional rate increases.
Vice president of Luno, Vijay Ayyar, added thoughts of his own. He declared that it certainly seems like Bitcoin has hit its bottom, meaning that it can now only rebound and head back up.
All in all 2023 is off to a promising start. Bitcoin futures look bright, a rates slash is on the cards, and inflation seems to be easing. Hence smart crypto traders are already starting to make big plans for the year ahead.
