The cryptocurrency market faces another difficult year

PETALING JAYA: Analysts and experts are forecasting another challenging year for cryptocurrency in 2023 due to the general economic backdrop and specific cryptocurrency scandals imploding in the industry, such as the recent Sam Bankman-Fried FTX crash.

Luno Malaysia country manager Aaron Tang said overall market conditions are under pressure due to the global macro environment and specific events in the cryptocurrency industry.

“We believe in the future potential of cryptocurrencies, but we are also insightful and sensitive about investment risks,” he said Sunbiz.

The firm’s emphasis now is to remain steadfast on the education-focused approach and focus on providing investors with knowledge and information.

“We believe 2023 will see the cryptocurrency landscape continue to mature and expand in terms of scale, utility and acceptance as cryptocurrencies have long-term potential despite price swings,” he said.

Based on data from coinmarketcap.com, the aggregate value of more than 22,000 digital currencies has plummeted from nearly US$3 trillion (RM13 trillion) in November 2021 to US$798.7 billion as of Jan. 2, a decline of 92.5% in just over a year.

PayPal and Meta alum David Marcus, as well as the CEO and founder of the Bitcoin company Lightspark, in a blog post published on Dec. 30, 2022, predicted that the cryptocurrency winter will last until 2023 and possibly 2024.

“It will take a couple of years for the market to recover from the abuse of unscrupulous players and for responsible regulation to arrive. Consumer confidence will also take a few years to rebuild, but ultimately I believe this will prove to be a beneficial reset for legitimate industry players in the long run.

“The years of creating a token out of thin air and making millions are over. The music stopped. We’re back to our normal programming of having to create real value and solve real-world problems,” she said.

Tradeview Capital CEO Ng Zhu Hann has warned that there is nothing stopping digital assets from going to zero in the event of an implosion and defaults in the cryptocurrency sector continue.

“As long as the interest rate remains at a high level with attractive risk-free rate returns, it is difficult for funds to flow into the cryptocurrency sector, unlike when hot money was readily available for speculation over the past couple of years,” he has declared.

However, he is optimistic that blockchain technology holds promise as its development continues for years to come.

Meanwhile, Chik Mun Leong, a cryptocurrency enthusiast and certified Luno educator, said the prospects for cryptocurrency in 2023 will remain dim due to the global economic outlook and the slow development of mass cryptocurrency adoption.

“However, this will improve rapidly as we can see that many global banks and institutions are starting to adopt cryptocurrency in various utilities,” he concluded.

Additionally, Chik is optimistic as he believes the cryptocurrency is now near the bottom, which provides opportunities for those looking to invest in digital assets.

“My minimum goal is between USD 12,000 and USD 13,000 (bitcoin) by the end of 2023 and will recover in years,” he said.

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