Huobi Calls Bitcoin and Ether Bottoms, Predicts Recovery After Q1 2023

Huobi Research, a subsidiary of Huobi Global, estimated in its Global Crypto Annual Report 2022-2023 that the prices of bitcoin and ether will start to rise after the first quarter of 2023. Until then, they may find a bottom of $15,000 and $1,000, respectively.

The company touched on FTX’s collapse, describing it as “one of the catastrophes of the financial world.” Other events in the crypto world so far this year include Terra’s collapse and Three Arrows Capital’s bankruptcy. Huobi believes these adverse events will prompt global regulators to impose relevant rules on the sector.

The report also determined that Vietnam has the highest crypto adoption rate (with around 20 million users) and is the second most mature cryptocurrency market after the US.

Huobi’s price forecast

According to the research, the bear market for bitcoin and ether could last for a few more months, during which the USD value of the primary cryptocurrency could shrink by another 13%, while ETH could decline by over 20%. The downturn should consolidate in the first quarter of next year, after which Huobi expects a “decent recovery” to occur.

The Federal Reserve is supposed to slow rate hikes in early 2023, which could be among the main factors driving up crypto prices, the exchange stated.

“In other words, the pace of hikes is slowing, the toughest part of this cycle has passed, and the bottom of monetary policy has almost been formed.”

Huobi believes that FTX’s demise was the “last bullet” in the current crypto winter. Negative events that have sent shockwaves throughout the industry also include the crash of Terra’s algorithmic stablecoin – UST – and its native token – LUNA – as well as the bankruptcy of Three Arrows Capital (3AC). According to Huobi, global watchdogs will speed up the enforcement of rules in the space to prevent future disruptions.

“Consequences have been seen in the market, the effects will gradually be digested by the market, and a bottom will form during the fluctuations, which is expected to last until the first quarter of 2023.”

Vietnam shows the way

Huobi’s report evaluated the most active nations in the blockchain sector, naming Vietnam as the world leader in crypto adoption. The Southeast Asian country has around 20 million users and is the second most mature cryptocurrency market after the United States.

Local governments have recently presented a cashless policy and have set relatively flexible crypto tax legislation to further encourage the use of digital currencies.

“At the same time, the traditional financial system in the region remains primitive, turning users away to the more efficient alternative: cryptocurrency.”

A recent chain analysis survey also placed Vietnam at the top of the list. According to the results, 21% of Vietnamese consumers have used or owned bitcoin or alternative coins at some point in their lives.