The transition into the New Year is not particularly rocky for cryptocurrencies, especially Bitcoin.
The digital currency king fell 0.2% over the past 24 hours to $16,551.22, according to data firm. coin gecko.
The last week of 2022 saw little movement in cryptocurrency prices. Thus, Bitcoin (BTC) price closed down almost 2% last week. Over the past year, the world’s first cryptocurrency in terms of market value has lost 65% of its value.
The drop affected the entire cryptocurrency market, with its value below $1 trillion. This market, which in November 2021 he was worth over $3 trillion, is now worth $828 billion.
On the first day of 2023, the cryptocurrency market fell 0.4%.
Cryptocurrencies are affected by various factors.
There are external reasons, such as the fact that investors are now treating crypto assets like technology stocks. This means liquidating them as soon as there is economic uncertainty, as it is now.
Many economists, for example, recession In preparation for this sharp slowdown in economic activity, many investors are reducing their exposure to risky assets such as cryptocurrencies.
The sector has suffered, among other things, from numerous scandals related to the crypto space.was Liquidity A crisis that affected many prominent crypto lenders after the unexpected collapse of sister tokens Luna and UST, or TerraUSD, in the summer of 2022.
This debacle led to the liquidation of Hedge fund Bankruptcy of Three Arrows Capital (3AC), Voyager Digital and Celelsia Network.Undermined companies such as BlockFi and Robinhood, among others (hood)- Get Free Reportenabled the emergence of a savior, Sam Bankman Freed, who would go bankrupt months later.
Former crypto emperor Bankman-Fried filed for Chapter 11 bankruptcy for his crypto empire on November 11th. This empire consisted of the FTX cryptocurrency exchange and his Alameda Research hedge fund.
This bankruptcy was a big earthquake for the financial industry. FTX, for example, because in February he was valued at $32 billion. Regulators are trying to piece together what happened.
They have filed a series of criminal and civil lawsuits against Bankman-Fried, which they accuse of defrauding FTX and Alameda customers and investors.
“Bankman-Fried committed years of massive fraud to divert billions of dollars in trading platform customer funds for his own benefit and help grow his cryptocurrency empire. It was a scheme,” said the Security and Trade Commission (SEC) alleges in a civil suit.
The scandal has already caused BlockFi to file for bankruptcy, which could affect other companies, according to industry sources. The FTX drop has yet to reveal all of its nasty surprises.
Meanwhile, it affects the price of cryptocurrencies. Ether (ETH), the second-largest cryptocurrency by market value after BTC, ended the year down 0.5% at $1,195.06. The rate of decline over the last 7 days is 2.1%.
Memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) are down 2% and 1% respectively in the first session of the year.
The crypto sector is also struggling with regulatory uncertainty as dissatisfaction and distrust from the general public is at an all-time high.