PETALING JAYA: Players and industry specialists predict another difficult year for cryptocurrency in 2023 due to overall economic environment as well as specific cryptocurrency scandals imploding in the industry, such as the recent Sam Bankman-Fried’s FTX collapse.
Luno Malaysia country manager Aaron Tang said general market condition is under pressure given the global macro environment and specific events within the crypto industry.
“We believe in the future potential of crypto but are also clear-sighted and sensible about the investment risks,” he told SunBiz.
The firm’s emphasis now is to stay firm on education-first approach and focus on equipping investors with knowledge and information.
“We believe that 2023 will see the crypto landscape continuing to mature and expand in terms of scale, utility, and acceptance as crypto has a long-term potential despite the price swings,” he said.
Based on data from coinmarketcap.com, the aggregate value of over 22,000 digital currencies tumbled from nearly US$3 trillion (RM13 trillion) in November 2021 to US$798.7 billion as of Jan 2 – a 92.5% pullback in only over one year.
PayPal and Meta alum as well as CEO and founder of Bitcoin firm Lightspark David Marcus in a blog post released on Dec 30, 2022 predicted that the crypto winter will last through 2023 and maybe 2024.
“It’ll take a couple of years for the market to recover from the abuse of unscrupulous players, and for responsible regulation to come through. Consumer trust is also going to take a few years to rebuild, but ultimately I believe this will prove to be a beneficial reset for legitimate industry players over the long run.”
“The years of creating a token out of thin air and making millions are over. The music has stopped. We’re back to our regular programming of having to create real value and solving real world problems,“ he said.
Tradeview Capital CEO Ng Zhu Hann warned that there is nothing stopping the digital assets from going to zero in the event of the implosion and defaults in the cryptocurrency sector continues.
“So long as the interest rate remains at an elevated level with risk free rate returns attractive, it is hard for funds to flow into the cryptocurrency sector unlike when the hot money was easily available for speculation in the past two years,“ he said.
However, he is optimistic that the blockchain technology holds promise as its development continues in the years to come.
Meanwhile, crypto enthusiast Chik Mun Leong said the outlook of cryptocurrency in 2023 will remain soft due to the global economic outlook and sluggish development of the mass adoption of cryptocurrency.
“However, this will improve rapidly as we can see many global banks and institutions are starting to adopt cryptocurrency in various utilities,” he concluded.
In addition, Chik is upbeat because he believes that the cryptocurrency is now near the bottom which presents opportunities for those looking to invest in the digital assets.
“My bottom target is at the range of US$12K to US$13K (bitcoin) by the end of 2023 and will be recovering in years,” he said.
