Investors believe recovery crypto market in 2023
2022.12.12 09:55
Investors believe recovery crypto market in 2023
Budrigannews.com – Most large banks and venture directors expect the digital currency market to get in 2023 following a fierce year that saw bitcoin sink around 75% from its unequaled high in November last year.
The latest in a string of liquidity shortages and bankruptcy filings that have shaken investors, the collapse of cryptocurrency exchange FTX, has highlighted the need for more regulations in this highly speculative industry.
and the next phase of growth is anticipated to be driven by projects centered on real-world functionalities and utility.
According to Matthew Sigel, head of digital assets research at VanEck, bitcoin could recover to $30,000 in the second half of 2023, even though it could still test a potential low of $10,000 to $12,000. had reached $69,000 in November 2021, a record high.
The following are some comments from investment managers and banks:
MARION LABOURE, DEUTSCHE BANK RESEARCH ANALYST:
“We believe this second ‘crypto winter’ will be a net positive because the FTX collapse will bring the crypto ecosystem closer to the established financial sector, despite the fact that investors have suffered significant losses.”
“Well-known structural issues in the crypto ecosystem were brought to light by the FTX crash: a lack of regulation and transparency, insufficient reserves, conflicts of interest, and unreliable data
“Binance is the biggest winner, as market concentration (in crypto exchanges) is greater than ever.”
“Crypto does not yet pose a threat to traditional assets of systemic contagion.”
J.P.MORGAN:
An analyst note from the beginning of December stated, “We believe that the Ethereum Merge and really the Ethereum Surge could be a big factor in terms of increasing the use-cases for blockchain into new areas, including financial services.”
According to developers, the Ethereum Merge was a significant software upgrade to the Ethereum blockchain that went live in September and reduced its energy consumption by 99.95%. Another anticipated upgrade, the Surge, is expected to lower costs in order to speed up transaction processing and make the Ethereum network safer.
“We continue to see the Ethereum Surge as a catalyst for development in the cryptocurrency markets, which appears to be at least six to twelve months away,” the statement reads.
BOFA:
“A shift in focus and capital from speculative trading to projects with real-world functionality, and companies with roadmaps to profitability may accelerate industry maturity,” analysts wrote in a note. “An increased urgency for regulation may enable greater institutional engagement.”
“We believe that we are still in the early stages of a significant application change that will occur over the next 30 years,”
GOLDMAN SACHS:
“While the FTX emergency has all the earmarks of being cresting, unbalanced reactions of mining to costs might debilitate the market headwind: in a note, economists stated, “now less sensitive to the downside while more sensitive to the upside.”
“Crypto mining has demonstrated a price-power relationship approximately one to one since the China crackdown in early 2022.” This elasticity, like that of the Ethereum Merge, has a tendency to decrease on the negative side while increasing on the positive side: Most recently, a 19% increase in Bitcoin power demand in early October (more than 1-to-3) followed the price rebound of 6% in early September.”
“We could see the possibility of some immunity to the current price crash in the middle of the FTX crisis and to potential stricter scrutiny from regulators in the coming months.” “Still too short history to verify the change.”
UBS:
“The open interest and volumes of BTC and ETH futures appear to be stabilizing now.” “Strategicians wrote in a note that this coincides with implied volatility returning to their realized range.”
“The easing of outflows from centralized exchanges demonstrates normalization. What’s more, the wrapped bitcoin (wBTC) rebate has generally returned subsequent to augmenting to as much as 1.5%.”
UBS, like the majority of other banks, is pessimistic about the near future.
“We don’t see any near-term positive catalyst for a strong recovery because regulation looms so large.”
VANECK’S HEAD OF DIGITAL ASSETS RESEARCH, Matthew SIGEL:
“We predict that many miners will restructure or merge as they look for fresh capital,” the authors write. “With bitcoin mining largely unprofitable given recent higher electricity prices and lower Bitcoin prices.”
They added that if the war in Ukraine were to end, some of the measures taken to reduce inflation might be reversed, making Bitcoin mining more politically acceptable.
“Blockchains will be used by institutions to simplify custody and settlement while lowering customer costs.”
“Ethernet, Polygon, and Cosmos are our predicted winners.”
“Latin America is seeing the fastest adoption of cryptocurrencies and stablecoins in the world due to persistent inflation and a young population. Brazil may be the first country to begin tokenizing sovereign debt.”
“Twitter will bolster its payment offerings with state money licenses, competing more directly with Venmo & Cash App and possibly incorporating cryptocurrency,” reads the announcement.
ERIC ROBERTSEN, STANDARD CHARTERED, GLOBAL HEAD OF RESEARCH:
Standard Chartered’s (OTC:) “surprise” scenario for 2023 calls for predicts that Bitcoin will fall below $5,000 if the current collapse continues.
TOM NORWOOD, LOOP MARKETS’ CEO and co-founder:
“Interest for bitcoin ought to keep on becoming paying little mind to economic situations as it is still better compared to most monetary standards in that it basically has a decent possibility going up ultimately, though most monetary standards are about to devalue after some time.”
In about six months, Norwood anticipates the cryptocurrency market to pick up.
“I think that’s going to have to come from real-world adoption by retail users, who aren’t buying crypto to gamble on new tokens but rather because they need to leave their local Fiat currency,” says the author.
