During the first couple of months of 2022, the cost of Bitcoin (BTC) stayed put under the $4,000 marker, thereby solidifying fears that the market was indeed in the midst of a long crypto wintertime. Not simply that, but all through 2022, this infinite witnessed the simultaneous collapse of around 2,000 cryptocurrencies — which lost effectually 80% of their combined market place cap.

Additionally, it can be seen that over the course of 2022, the full general perception of the crypto sector was greatly tarnished thanks to a number of scams and illegal actions that caused investors to lose a whole lot of money (estimated to be worth millions of dollars). As a result, loftier-profile personalities such equally Nouriel Roubini, a Nobel Prize-winning economist, went on record to claim that BTC was the female parent of all financial bubbles, thereby causing market panic to spread globally at quite a rapid pace.

Additionally, Ernst & Young also released a market study in early on 2022 that showed cybercriminals were able to steal around $1.five million per month in initial coin offering gain, totalling effectually $400 million of the funds raised.

As a effect of these shady developments, a whole host of legitimate projects went hole-and-corner, waiting for the unwanted noise to settle down — thus causing the crypto market place to suffer a neat deal. To put things into perspective, Forbes' "Fintech 50 — 2022," a list comprising of the globe'south most promising tech companies, featured just six blockchain projects. In comparison, 11 crypto companies were included in the 2022 listing.

A closer look at the thing

The bull run of 2022 really expanded the global reach of the crypto market, with many novice investors becoming aware of Bitcoin and its potential around that time. However, subsequently the flagship crypto nugget hit its best high value of nearly $twenty,000, almost analysts and experts started to realize that this positive momentum could not be sustained for much longer and that the market would invariably move to a more than bearish mode of operation.

Indeed, such was the case later on the first few months of 2022, when BTC's value tumbled down to $3,300. It was also around this price range that a number of experts thought Bitcoin had establish its bottom. Whenever an asset finds its bottom, its overall volatility more often than not tends to decline. The same was observed for BTC — so much so that during the first half of January 2022, the currency's native volatility dropped to extremely low levels.

BTC volatility chart, 2022–2020. Source: Coin360

BTC volatility chart, 2022–2020

Source: Coin360

Another important indicator that seems to suggest that Bitcoin bottomed out betwixt Dec 2022 and January 2022 is its hash ribbon quotient. In its about basic sense, a hash ribbon can be idea of equally a computational tool that combines the hash rate and mining difficulty of Bitcoin in lodge to identify sure time periods when buying the digital currency is at its most lucrative. In this regard, when the hash ribbon marker sends out a buy signal it oft indicates that a local bottom has been formed — which is exactly what happened with BTC at the start of 2022.

"The smart ones bought Bitcoin between $3K and $4K," Jeroen Van Lange told Cointelegraph. The contained analyst believes the run from $3,000 to $13,000 had a lot to do with market psychology and in item the fright of missing out:

"This was the ground layer for people who were already invested in 2022 but lost money in the behave market, nevertheless, they yet had a big conventionalities in Bitcoin."

Van Lange also outlined other reasons he believes helped push the price of Bitcoin in an upwardly direction:

  • The currency finding back up on its 200-calendar week moving average.
  • BTC's volatility touching extremely depression levels at the start of 2022.
  • The asset dropping by almost 85% from its all-time loftier value.

Additionally, in relation to the matter, Craig Russo, owner of Peer, a Boston-based startup behind the popular media outlet SludgeFeed, told Cointelegraph that he believes several factors combined to fuel the ascent of Bitcoin'south price during the first half of 2022, including "the supply/need dynamics of the upcoming cake reward halving and renewed belief in the inherent value of BTC as a consequence of major financial institutions and companies inbound the space." Russo too believes that the BTC price has predictably reacted to the market situation:

"It too stands to reason that Bitcoin was recovering from significantly oversold conditions that fueled a brusk squeeze at a few cardinal levels between $3K and $10K. All the same, subsequently topping out at around $14K, it has become credible that BTC is now stuck in a larger range."

Other key factors that helped thaw the crypto wintertime of 2022–19

Chinese bankroll

On October. 25, 2022, when the price of BTC lay at effectually $7,500, Chinese President 11 Jinping announced that he will be accelerating his country'due south efforts to adopt blockchain in club to promote novel technological innovation beyond a host of Red china's local industries. This was seen as a massive endorsement for the industry as a whole because past Oct. 27, the toll of a single Bitcoin surged to just under the $10,000 marking.

If that wasn't enough, it also came to light last year that People's republic of china is looking to release its very ain central banking company digital currency quondam during 2022. Termed the "digital yuan," the currency will essentially serve as tokenized form of money and will be backed by China's central banking authority — the People's Banking company of Communist china.

Frank Fu, manager of Fenbushi Capital, even so, believes that the value of BTC has indeed increased because of the annunciation, telling Cointelegraph that it was "purely due to general public'southward speculation."

Related: Chinese National Cryptocurrency Turns Out Non Being an Actual Crypto

Increased mainstream adoption

Over the last 12 months or and then, a number of established fiscal entities, such as JPMorgan Chase and Wells Fargo, announced that they were either working to create their very ain crypto tokens or making apply of blockchain tech to streamline their internal work processes. These mainstream endorsements helped increment confidence among investors operating within this relatively nascent marketplace space.

Bitcoin halving apprehension

Some other reason why the marketplace turned bullish is the possible spread of FOMO that permeated this space cheers to the Bitcoin halving upshot that is scheduled to take place on May 12, 2022.

Related: Bitcoin Halving, Explained

Following this latest halving event, BTC's native block reward quotient volition reduce from 12.five to vi.25 BTC. Accordingly, this will consequence in the number of Bitcoin that can be sourced per block becoming more than scarce.

Cyclical market move

The digital currency market goes through periodic cycles of monetary ups and downs. For example, after surging through all of 2022, the value of Bitcoin dropped quite considerably the following year. A similar tendency was observed in 2022 and 2022.

To proceeds a meliorate understanding of this dynamic ebb-and-flow trend, Cointelegraph reached out to Jeffery Liu Xun, CEO of XanPool, a peer-to-peer fiat gateway that is instant and does not require customers to take whatsoever custody risks. "It was most fourth dimension — Bitcoin is an nugget designed to go up," he said, going on:

"Now, equally with all markets, people go through greedy phases, fearful phases, and after the greedy phase of 2022, it'southward but natural that Bitcoin experienced a bearish fearful phase for a duration. Mind you that Bitcoin has e'er reached new all-time highs if you're looking at a time frame of 3 years."

Libra announcement

Earlier in 2022, Mark Zuckerberg presented to the earth his vision of a mainstream cryptocurrency that would allow users of social media platform Facebook to facilitate their local/international payments with the bear on of a push.

While Libra may not accept been able to garner the mainstream support that Zuckerberg and his team might have initially expected, it did help legitimize and educate people about the immense potential of this novel asset class.

Launch of Bakkt

September 2022 saw the launch of Intercontinental Substitution's long-awaited digital asset platform, Bakkt. The platform was extremely hyped before its launch considering it finally gave institutional players a road to enter this burgeoning domain in the easiest, almost hassle-gratis way possible.

The platform's daily Bitcoin futures volume hit its all-time high during Nov 2022, thereby pointing toward an increasing amount of consumer involvement in this market infinite. At the starting time of 2022, FTX and CME likewise joined the market place, which should continue to drive up demand.

The terminate?

While the crypto sector made a respectable recovery in 2022 — with the price of a single Bitcoin scaling upwardly to the $13,000 mark once during June and and then again in July — all through Nov and Dec, the market place continued to showcase bearish signals that forced the price of the premier cryptocurrency to recede and hover effectually the $7,500 region.

This was perchance due to the fact that during the offset one-half of Nov, the founders and creators of the PLUS token Ponzi scheme were taken into custody past Chinese police enforcement agencies for scamming investors to the tune of $3 billion worth of Bitcoin.

PLUS token was i of the largest cryptocurrency-related Ponzi schemes ever uncovered, with the project promising to provide its investors with ridiculous monthly returns ranging between 9% and 18%. It is believed that after the unearthing of this scam, a lot of investors started to cash out their holdings in order to minimize their losses (via a shot of different Chinese exchanges such as Huobi and OKEx), thereby forcing Bitcoin's value to drop and stay put around the $7,500 price point.

With that existence said, since the turn of the new year, things take looked much better for the market as a whole, with Bitcoin gradually gaining value and sitting at a respectable price signal between $8,600 and $8,800 over the past few days.