“This is not the end of crypto winter.” What will happen to bitcoin in January 2023

31.12.2022

3302

2 min

At the end of 2022, the price of bitcoin updated its two-year low, falling to $15 500. Since the beginning of the year, the first cryptocurrency has fallen in price by almost 64%. ENCRY Foundation co-founder Roman Nekrasov explained why the value of bitcoin may rise as early as January 2023.

The Christmas rally did not work out

Usually, on the eve of Christmas bitcoin grows, and with it the entire crypto market, Nekrasov noted. According to him, this is due to a general increase in spending by US households, who are more active in parting out their savings before Christmas.

“But this year, December has been overshadowed by the aftermath of the FTX crash, with markets still shaken by inflation, key rate changes, geopolitical tensions, and so on. These are factors that play against any growth — crypto investors are actively withdrawing coins from centralized crypto exchanges and waiting to see who will fall next,” the expert explained.

According to Nekrasov, the slowdown in inflation in the United States and other factors point to a high risk of recession, which could have a positive impact on bitcoin and the crypto market. In the event of a recession, there would be a decrease in demand for energy and, consequently, in its value.

“If household spending on energy decreases, then some kind of extra money will be freed up, spending on other expenditure items will increase, some of it could go into the crypto market,” the ENCRY Foundation co-founder added.

Such a scenario may lead to the fact that in January 2023 bitcoin will grow to $20 000, Nekrasov predicted. But in his view, the asset is unlikely to be able to consolidate at that level.