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South Korean experts have predicted that the capitalization of the crypto market will grow from around $800 billion to around $1.5 trillion next year. And, they say, the “stabilization” of inflation figures “during the first half of next year” will whet investors’ appetite for Bitcoin (BTC) and other tokens.

The claims were made in a study titled “2023 Cryptoasset Market Prospect Report” by the research wing of South Korean crypto exchange Korbit, and reported by Daily.

Bitcoin’s market capitalization is currently down more than 65% from a year ago, but some seem to be hoping for a recovery.

One-Year BTC Market Cap Figures. (Source: YCharts)

Korbit researchers claimed that while central banks like the U.S. Federal Reserve have “enhanced risk asset avoidance,” there are signs the Fed will move away from 2022 policies next year. – triggering a “recovery” in “demand for higher assets”. risky assets” like crypto.

The researchers added that they expect 2023 “to be similar to 2019” – a time when crypto began to gradually recover from the freezing crypto winter of 2018.

One of the study’s lead researchers said:

“The public often thinks that the 2018 crypto crash continued into 2019. But in fact, bitcoin price recovery in 2019 was 92%.”

Korbit researchers said Fed policies in early 2019 saw the central bank halt a series of interest rate hikes. This led to an “accommodating pivot” in bitcoin prices in September of the same year. A similar event is likely to occur next year – provided the Fed actually refrains from raising interest rates.

Bitcoin price versus USD (blue) versus US federal funds rate (red). (Source: Korbit)

The researchers also made the following predictions for 2023:

  • Adoption will increase – and traditional businesses will start looking at not only BTC options, but also Ethereum (ETH) proposals for adoption
  • The synergy between stablecoins, the DeFi sector and traditional financial institutions will increase
  • Tether (USDT), USD coin (USDC)and BUSD “will compete fiercely for supremacy” as stablecoins race to become “the next dollar”

The events likely to induce “market volatility” next year are:

  • New Regulations Introduced Globally Following FTX Collapse
  • New concerns about centralized exchanges, again due to the fall of FTX and fallout
  • The verdict of the legal fight between the United States Securities and Exchange Commission and Ripple
  • the success or failure of progressive U.S. crypto regulation, led by the likes of Wyoming Senator Cynthia Lummis

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