BitMEX outlines three scenarios for crypto this year, says market recovery a likely outcome
Digital asset exchange BitMEX unveils its forecast for crypto this year as the market faces a potential change in the macroeconomic landscape.
In a new blog post, BitMEX says that crypto could take three different routes this year depending on the guidelines adopted by the Federal Reserve and other regulatory agencies.
In scenario one, the exchange says that crypto could witness an improvement in risk appetite should the Federal Reserve take a step back in raising interest rates. According to BitMEX, a Fed pivot could open the floodgates for global capital markets and trigger a rally for risk assets, including cryptos like Bitcoin (BTC) and Ethereum (ETH).
“Once the crypto industry has learned the lessons of 2022 (especially those taught by entities including Three Arrows Capital, FTX and Genesis) and rid itself of poorly run businesses and suspect models, we should see a quick and healthy upturn in high-quality assets, such as Bitcoin and ETH.”
BitMEX also highlights that scenario one is their core hypothesis based on various economic forecasts and possible slowdown of inflation.
As for scenario two, BitMEX says crypto could face an extended bear market if inflation remains persistently high, forcing the Federal Reserve to continue raising interest rates. According to the stock exchange, this scenario seems less likely as inflation is beginning to show signs of abating.
For the third scenario, BitMEX sees crypto becoming a safer asset class as the government creates guidelines that protect investors. The exchange says that crypto regulation involving trading, custody and investment could accelerate throughout the year. In this scenario, BitMEX predicts an increase in crypto adoption and the emergence of new use cases for blockchain technology.
Says the switch to scenario three,
“Bitcoin and ETH will re-emerge as the dominant virtual currencies, while many retail users will get their first taste of crypto through the rise of next-gen games, NFTs [non-fungible tokens]Web3 and the metaverse, making crypto a more comprehensible, immersive experience.”
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered straight to your inbox
Check price action
Follow us on TwitterFacebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and trades are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
