• BitMEX believes that the Federal Reserve will most likely cease its interest rate hikes by the end of the year.
• The company argued that such a policy amendment could fuel a market recovery and boost interest in the cryptocurrency sector.
• CEO Stephan Lutz thinks central banks will have no other choice but to abandon their aggressive rate hike strategy soon.
Here is What 2023 Holds for Bitcoin, According to BitMEX
Federal Reserve Interest Rate Hikes
The cryptocurrency exchange BitMEX outlined some possible scenarios that could unfold in the coming months for the cryptocurrency industry. It believes the Federal Reserve will most probably cease its interest rate hikes by the end of the year, triggering a flow of funds into global capital markets and risk-off assets. Cryptocurrencies, such as bitcoin and ether, could benefit in such cases. Currently, the percentage stands at 4.75%, a figure last seen during the financial crash in 2008.
Possible Market Recovery
BitMEX argued that such a policy amendment could fuel a market recovery and boost interest in the cryptocurrency sector as investors will likely seek exposure to riskier assets in search of greater returns. The pivot, when it comes, will help resume the flow of funds back into global capital markets and trigger a rally, including in crypto assets.” According to CEO Stephan Lutz central banks will have no other chance but abandon their aggressive rate hike strategy soon because otherwise, it could result in “a further decline in real economic activity.”
Impact on Crypto Market
Most market participants anticipate that cryptocurrencies would go through another price surge if central banks stop hiking rates this year which would create more demand for digital assets from retail investors who are looking for higher returns than traditional investments can provide them with at this moment. This influx of new investors should also bring additional liquidity into crypto exchanges which would be beneficial to everyone involved – traders as well as developers working on decentralized applications (dApps).
Crypto Regulation
Regulation also plays an important role when it comes to cryptocurrencies’ future development since governments still need to fix certain issues related to taxation or anti-money laundering (AML) laws before they fully accept digital assets as legitimate financial instruments within their jurisdictions. However, many countries are already making progress towards creating regulatory frameworks tailored specifically for blockchain-based technologies so BitMEX expects this trend to continue throughout 2023 and beyond which should be beneficial for all players involved – both businesses dealing with digital currencies directly and those whose products/services rely on distributed ledger technology (DLT).
Conclusion
In conclusion, according to BitMEX’s predictions there is reason to believe that 2023 could be a great year for cryptocurrencies provided that central banks manage their monetary policies properly and governments move forward with regulations geared towards supporting DLT-based projects. If these two things happen then we should expect more people getting interested in investing/trading cryptos as well as an increase in dApp usage over time – both factors which are necessary conditions if one wants digital tokens become widely accepted means of payment or store value like fiat currencies currently are today.
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