2022 is a year that will definitely go down in the history books. We will not analyze the consequences of all events this year, but the cryptocurrency market is worth discussing. Inflation engulfed the world economy. The industry is experiencing drops of "whales": BTC, ETH, and many more. What awaits us at the end of 2022 — at the beginning of 2023? The short answer is that no one knows. For the more expanded one, let's analyze the latest developments in the world of cryptocurrency and what they mean.
Binance vs FTX
Although these are international exchanges, there was still an unspoken division: Binance works more for the Chinese market, and FTX for the American one. Until recently.
In November, Binance signed a non-binding agreement to buy FTX.com to help cover its competitors' "liquidity crisis". It all started with a published private document that showed that 22% of all deposits and withdrawals using digital wallets on FTX are linked to market maker Alameda Research, which is also owned by Bankman-Fried. This creates a conflict of interest. In the face of this news, Changpeng Zhao announced that he will sell all his FTT (FTX exchange tokens) assets. And although Alameda representatives offered to buy them for $22 each, Zhao refused. Feeling that something bad is coming, people started withdrawing their funds from FTX, and in 72 hours about $6 billion was withdrawn. However, this was not possible for everyone, as the withdrawal of funds on the stock exchange was limited. And so, after a series of scandals, Binance is now ready to absorb its competitors.
And yes, this is only possible in the world of cryptocurrencies, as this market is not regulated.
What will it affect?
Cryptocurrency prices
Bitcoin has already fallen by almost 20%. ETH, SOL, BNB and, of course, FTT have fallen as well. This whole story had a negative effect on the market in general.
Rigidity of regulation
Many investors are worried about the future of digital currencies, especially after the FTX fiasco. The threat of regulation has always threatened the cryptocurrency market. Today it became known that Germany is studying the business practices of Coinbase for possible reinforcements.
BTC price
We are all watching the Bitcoin curve. And the most popular cryptocurrency continues to fall in price. Most experts agree on one thing — the fall will continue. In the face of the instability of the world economy, inflation and market processes, BTC may fall to $15,000. If the price drops to its minimum, it is a profitable entry point. And as the golden rule says: "Buy low — sell high".
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Cryptocurrency VS Inflation
Experts have not reached a consensus on how inflation-resistant cryptocurrency is. In theory, the authorities of different countries do not affect the cryptocurrency blockchain. They cannot devalue digital money. According to this logic, inflation is a good thing for crypto. The fiat currency loses its value, accordingly people invest in cryptocurrency, and thus the demand increases the price. In fact, we see that even such assets like Bitcoin lose up to two-thirds of their original value. During times of instability, investors tend to choose more "guaranteed" deposits rather than volatile ones. Simply put, cryptocurrency has not yet proven to be an effective means of protection against inflation.
Conclusion
The main conclusion is that the market will be changing and you need to be ready for it. Be on the wave with cryptotrends, constantly follow the news, and not only narrowly focused ones. 2022 continues to show that even though cryptocurrency is an "independent" industry, it does not live in a vacuum and is closely related to other economic processes.
