Led by Bitcoin, blockchain industry starts 2023 off strong: Report
2023 is off to a great start with Bitcoin (BTC) skyrocketing 40% in January. However, the good news is not limited to bitcoin as this price increase has caused ripple effects throughout the crypto universe. Mining revenue jumped $22.66 million in January, with cryptocurrency-related stocks doubling on average. Despite this good news, venture capital investments are down 23% from the previous month.
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Bitcoin gains momentum in the first quarter of 2023
Bitcoin posted the best monthly price performance since October 2021, gaining almost 40% in January. Following the publication of the Consumer Price Index, which showed a slowdown in inflation in December 2022, cryptocurrency and stock prices began to decline as retail sales data fell short of expectations and earnings declined. When BTC hit a multi-month high of $23,920 on Jan. 29, all eyes turned to the Feb. 1 meeting of the Federal Open Market Committee, which raised its benchmark interest rate by 25 basis points, citing weakening but still elevated inflation. BTC showed some volatility around the $23,000 level, which suggests that the news has been priced in.
As BTC gained bullish momentum in January, centralized exchange inflows and outflows have normalized. The largest monthly coin outflow in history occurred after the FTX crash in November 2022, reaching 200,000 BTC per month across all exchanges. Net flows are now closer to neutral, with a receding trend towards high outflows, indicating that investors are returning to the cryptocurrency market. BTC bullish month broke 50-, 100- and 200-day moving averages for the first time in over a year, with cohorts of investors return to profitability previously destroyed in 2022.
DeFi TVL Grows $10 Billion Despite Constant Concerns and Hacks
Several altcoins, including Gala (GALA), Aptos (APT), Threshold (T), MANA Decentraland, and Solana (SOL), posted over 100% monthly gains in early 2023 as the price of Bitcoin began to rise in early 2023 of the year. This was driven by the extreme prevalence of negative sentiment and a glut of short positions towards the end of 2022. However, Solana-based protocol Friktion still announced a suspension of deposits due to a “tough DeFi market in the coming months.” ”, suggesting that a further recession could occur in the near future.
Simultaneously, several developments in the darker world of exploits and hacks continued along the path of 2022. Namely, the Abraham Eisenberg saga unfolds when Mango Markets sued the hacker for $47 million in damages following his $117 million attack in October 2022. Recently, there have been several cases in the industry of moving stolen funds.
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Credit : cointelegraph.com