The main problems of the current year will smoothly move into the next, so the situation on the cryptocurrency market in 2023 should not differ much from 2022, Anton Bykov, a senior analyst at Esperio, told Izvestiya.
According to him, the key driver of market quotes is the low cost of borrowed capital.
“That is why in 2020-2021 we observed a rapid growth in the capitalization of literally all instruments, because the central banks sought to stimulate activity as much as possible through available funding,” the expert specified.
Currently, central banks are tightening the terms of loans, raising rates as part of the fight against inflation. As a result, speculative activity has decreased, the players have taken a wait-and-see attitude, he added.
Bykov noted that, judging by the latest statements by representatives of the US Federal Reserve System, the regulator plans to keep rates at high levels for a long time, possibly for the whole next year. Such decisions are made to fight inflation, “which is not yet losing ground.”
“Add to this the economic uncertainty, which motivates investors to keep capital in safe havens, and not risky instruments like stocks and cryptocurrencies. That is why it is hard to believe in the growth of digital assets in 2023,” the expert said.
He also recalled the serious reputational losses of the outgoing year, including the collapse of the Terra currency and the accusation of the founder of the bankrupt FTX crypto exchange, Sam Bankman-Freed, of financial fraud.
“In addition to retail investors, a large number of institutional investors also suffered, so it is unlikely that there will be a large number of enthusiasts who advertise cryptocurrency among “smart money,” Bykov emphasized.
The analyst believes that against this background, Bitcoin is able to fall below $10,000.
“Apparently, some attempts to stir up the market will occur only closer to 2024, when the losses of 2022 will be forgotten, and halving will come to the fore – another reduction in rewards for bitcoin miners. Under this case, loud talk about the finiteness of the issue of bitcoin and deflationary pressure always begins, which should contribute to the growth of speculative interest, ”concluded Bykov.
On December 16, hacker and crypto trader Petr Levashov, also known as Peter Severa, said in an interview with cryptonewsherald that cryptocurrencies will become an integral part of business in the future. In his opinion, the main advantage of cryptocurrencies over conventional currencies is their security.