New year. Old story.
As investors savored the waning hours of the extended New Year’s holiday weekend, bitcoin plugged along in the same narrow range it occupied for the last 15 days of 2022.
The largest cryptocurrency by market capitalization was changing hands at about $16,700, up 0.6% over the past 24 hours amid light trading typical for the holiday season. BTC has been hovering between $16,400 and $17,000 since mid-December when fears about inflation and sharp recession rekindled.
Whether crypto prices rebound in 2023, and if so, when, is uncertain, although analysts seem unified in the belief that market misery won’t exceed the torment of 2022 when crypto exchange giant FTX’s November failure capped a year of industry shipwrecks.
“The crypto community won’t be sad to see the back of 2022 and who can blame them?” quipped Craig Erlam, senior analyst at foreign exchange market maker Oanda, in a recent email. “Who knows what’s to come in 2023 but at the very least, they’ll be hoping to put the FTX scandal behind them and focus once more on innovation and adoption.”
Yet Erlam also noted warily: “That may be a lot to ask in the short term, especially if other market factors aren’t favourable. No doubt it will be another intriguing year for the space.”
Ether followed BTC’s Monday path to stick in its own two-week range between $1,150 and $1,230. The second largest crypto by market value was recently trading at about $1,215, a 1.3% gain from Sunday, same time. Other major cryptos spent the day largely in the green with XRP, the token of the XRP open source public blockchain, XRP Ledger, and MATIC, the token of layer 2 platform Polygon Network, rising more than 4% and 3%, respectively.
SOL, the native cryptocurrency of embattled blockchain platform Solana, continued a surge that began last week when Ethereum co-founder Vitalik Buterin tweeted positively about the protocol. SOL was recently up 13%, although at just above $11, it has lost 93% of its value from a year ago when it was trading over $176 – a result of its entanglement with the imploded Terra ecosystem and FTX.
The CoinDesk Market Index (CDI), an index measuring cryptos’ performance, recently jumped 1.5%.
Equity indexes closed their own year of distress fittingly with the Nasdaq, the S&P 500 and Dow Jones Industrial Average all falling slightly. The tech-heavy Nasdaq plummeted a whopping 33%, while the S&P, which has a robust technology component, plunged nearly 20% as markets flinched from the heavy body blows of macroeconomic uncertainty, socio-political unrest and rising prices.
Meanwhile, FTX ripples continued to widen with a co-founder of crypto exchange Gemini accusing Digital Currency Group CEO Barry Silbert of “bad faith stall tactics” as their respective companies tangle over a business disagreement precipitated by FTX’s multi-billion-dollar implosion late last year.
Cameron Winklevoss blasted Silbert in an open letter posted to Twitter, alleging crypto broker Genesis Global Capital and its parent company, DCG, owe Gemini’s clients $900 million. The letter alleges Gemini has awaited word on a repayment agreement for six weeks to no avail. DCG is also CoinDesk’s parent company.
Silbert responded, tweeting that DCG delivered to Genesis and Gemini’s advisers a proposal on Dec. 29, 2022, and has not had any response.
Looking ahead to the wider landscape, Oanda’s Erlam wrote that much “now hangs on the economic data and how companies plan to adapt to a potentially impending recession.”
“The data towards the back end of 2022 wasn’t as promising as hoped and the communication from the Fed and others has remained more hawkish than investors would like,” he wrote.
