Bitmex Outlines Crypto Market Outlook for 2023 – Here’s What Traders Can Expect

The cryptocurrency exchange, BitMEX, has released a report on the state of the crypto industry and the potential scenarios that could play out in 2023. In the report titled “Crypto Outlook,” BitMEX discusses the industry’s possible future and how investors can make the most of upcoming developments.

Scenario One

The report suggests that risk assets could gain traction if central bankers slow down or halt rate hikes, which could lead to a market recovery. BitMEX expects central bankers to slow down or halt rate hikes by the second half of 2023 and begin cutting rates towards the year-end. 

This is likely to resume the flow of funds back into global capital markets, including crypto assets, and trigger a rally. With the crypto industry having learned from 2022 and ridding itself of badly run businesses and suspect models, BitMEX expects a swift and healthy rebound in high-quality assets like Bitcoin and ETH.

Scenario Two

The report also suggests that risk assets could lose ground if external events keep inflation high and force monetary policymakers to continue raising rates. This would damage investor appetite for various asset classes, including crypto, and prolong the industry’s downturn. 

However, the report notes that Bitcoin’s price has been relatively stable around current levels for the past several months, even during the worst of the crisis. While a prolonged period of risk-off sentiment is a lower-probability outcome, investors are nevertheless advised to exercise caution and focus on projects driven by legitimate use cases and broad user adoption, which help generate healthy cash flows and are the hallmark of successful business models.

Scenario Three

According to BitMEX, crypto assets could become a less risky asset over time after business models were tested last year. Innovations helped broaden and scale up use cases while regulations evolved to protect investors. BitMEX believes that regulators will continue to embrace the technology and its advantages, with discussions occurring at the most senior levels within governments. The rise in use cases has led to a growing acceptance and endorsement of crypto assets by institutional investors, prompting policymakers to work on evolving regulations. BitMEX expects regulations to continue to evolve throughout 2023. 

As adoption grows and regulations evolve, blockchain tech will open the door to a range of new use cases until there is a shift away from the perception of crypto technologies as mere financial assets; instead, people will begin to see them as the future of how we create and validate assets, as well as identify and transfer ownership of them.