Cointraffic Crypto News Recap January 2023
The year 2022 is in the books, and a lot has happened in the first month of 2023. However, it is equally important to look to the future, as the cryptocurrency industry never sleeps.
2022 Trading Volume Dips Hard
Many people will remember 2022 as a bearish year for cryptocurrencies. Prices fell left, right, and center, affecting all currencies, assets, and tokens. However, it is also worth noting that the overall trading volume decreased last year, primarily in December 2022. That was a remarkable development, considering the overall volumes picked up strongly in November.
One could explain the November 2022 numbers by looking at the collapse of the FTX exchange. Once the fallout was over and most market worries were gone, the trading volume went back to its normal pattern for 2022. Low volume can make people less interested in crypto assets, which can keep the market in a bearish state for longer. However, all markets rebounded well in January 2023.
2022 Was A Good Year For Crypto Crime
Despite all cryptocurrencies losing value last year, criminals had a good year. In particular, illegal use of crypto assets rose to a record $20,1 billion in 2022. One would expect the opposite to happen, since lower crypto prices make the industry less appealing. However, criminals seemingly didn't care and increased the value of their transactions for the second year in a row.
Curiously, most of that activity stems from sanctioned entities. Those entities cannot rely on traditional means to send and receive money, so they attempt to bypass restrictions through cryptocurrencies. A lot of money ended up at Garantex, a sanctioned Russian cryptocurrency exchange. Moreover, criminal income primarily came from stolen crypto.
Hong Kong Has Bold Crypto Plans
Asia is an interesting continent for cryptocurrency activities. China tries to ban everything, whereas Japan has a nearly complete legal framework for such activities. Hong Kong wants to step up to the plate and become a "global crypto hub". That includes committing to developing the necessary infrastructure to support such activities. More importantly, regulators and government officials are eager to explore an open dialog with companies and industry experts.
Progress has been made to make the country more appealing to crypto firms. Policymakers are working on a licensing system for service providers. That would give industry participants broader market recognition in the coming years. In addition, several pilot projects are underway to explore use cases for virtual assets and their underpinning technology.
Crypto.com and Gemini Layoffs
The global technology industry has been hit with layoffs. As a result, the crypto and blockchain industries experienced a similar trend in 2022 and early 2023. Prominent companies are forced to reduce their staff size and save costs. Crypto.com laid off 20% of its employees due to unfavorable market conditions and other concerns. Given the company's global visibility, that reduction is getting a lot of attention. However, it failed to escape the FTX.com collapse unscathed, which sent shockwaves through the world.
Unsurprisingly, a similar trend affects Gemini, another prominent crypto entity. The exchange already laid off 10% of its workforce in 2022 and plans to lay off another 10% in 2023. It is the third round of layoffs - that we know of - for the company. The company, founded by the Winklevoss twins, remained in dire straits since Genesis Global Capital went bankrupt. That development prevents Gemini from paying out Earn account holders.
Amazon Eyes The NFT Space
When big brands get excited about non-fungible tokens, anything can happen. Amazon is the latest entrant into the space, although there are many questions regarding its upcoming project. The world's leading retailer apparently has big plans for Web3 technology and aims to establish a digital asset "kingdom". The NFT initiative, slated to release this spring, is the first major project to that extent.
Although little is known about the project, it appears Amazon wants to let customers play games and earn "free" NFTs. That doesn't mean the non-fungible tokens won't have value, although their utility remains to be determined. Nevertheless, it would boost the NFT industry if Amazon got involved and maintained a solid position for a while.
Bullish January 2023 Momentum
The big trend in January 2023 is how the crypto markets have become more bullish again. After hitting lows in late December 2023, momentum has shifted for Bitcoin and other cryptocurrencies. It also resulted in the combined crypto market cap surpassing $1 trillion for the first time since the collapse of FTX. The industry is healing and things have begun looking up again.
Primary markets, like Bitcoin and Ethereum, overcame a long slump to reach key levels again. Bitcoin surpassed $23,000 relatively quickly, and Ethereum trades above $1,500 again. Alternative markets have yet to note substantial momentum, although there has been excitement regarding Aptos and other assets. Even so, some bearish sentiment is ahead of major central banks potentially announcing interest rate hikes. That said, the Fear & Greed index for Bitcoin and Ethereum still looks promising.