What awaits the cryptocurrency markets in 2023?

What awaits the cryptocurrency markets in 2023?

What awaits the cryptocurrency markets in 2023? Cryptocurrency markets were affected by many events and economic developments in 2022. The developments experienced in this year, dominated by the bear market, made investors ask how 2023 will go. GateTR Country Manager Kafkas Sönmez conveyed his 2023 expectations for the crypto money markets.

Cryptocurrencies followed a highly volatile course in 2022. When the rising inflation all over the world prompted the central banks to implement contractionary policies, funds outflowed from many traditional financial instruments and crypto money markets. On the other hand, some negative developments in the crypto ecosystem caused additional pressure on the market. Due to all these issues, the discussions about the course of the crypto money markets in the new year have flared up. GateTR Country Manager Kafkas Sönmez shared his 2023 expectations regarding cryptocurrencies.

“Inflation will be one of the main agenda items in the first half of 2023”

“2022 has been a year when inflation made itself felt worldwide and many central banks shaped their monetary policies to suppress high inflation. Inflation levels, especially in European countries and the USA, were above the data of the last 30 years. In 2023, inflation will continue to be one of the first items on the global economic agenda, especially during the first half. However, a slight decline in commodity prices and a downward trend in global demand with interest rate hikes indicate that the fight against inflation has begun to yield results. What awaits the cryptocurrency markets in 2023?

“Global growth expectations are being revised downwards”

Many central banks, especially the Fed, have used monetary policies as a means of fighting inflation in the past period. However, negative realizations may occur in other indicators when the objective is selected over one indicator in monetary policy preferences. In this context, the recent interest rate hikes to reduce inflation have also brought recession concerns. The contraction in demand, in particular, puts a serious pressure on growth rates. Many international financial authorities are revising their growth expectations in 2023 downwards. However, the thought that central banks will have a more “dove” attitude in their monetary policies restrains the negative expectations in the second half of 2023 to some extent.

“The fall in inflation will dovetail central banks”

Many factors, such as the deterioration in the global supply chain with the pandemic and the rise in commodity prices, caused a global rise in inflation in 2022. In this context, many central banks set the fight against inflation as their main target and displayed a very “hawkish” attitude in their monetary policies. Along with this attitude, we have seen that different contractionary monetary policies, especially interest rate hikes, have been implemented. However, these contractionary monetary policies also have a negative impact on growth data. Therefore, we can say that in 2023, central banks will adopt a more moderate approach in their monetary policy preferences with the decrease in inflation.

“What awaits the cryptocurrency markets?”

With the rising inflation in 2022, central banks implemented contractionary policies, which negatively affected the crypto money markets. The decline in inflation and the increase in recession concerns indicate that the strict stance in monetary policies will soften in the upcoming period. This is a positive development for the cryptocurrency markets. Therefore, we can say that the necessary conditions may arise for the market, which was suppressed by interest rate hikes in 2023, to enter a “bullish” period. The reduction of uncertainties, especially in the second half of the year, will be important for cryptocurrencies to recover.

“There will be a decrease in the negativities in the ecosystem”

What awaits the cryptocurrency markets in 2023? 2022 has been a year when crypto money markets have been negatively affected not only by global economic developments, but also by events in the ecosystem. In particular, the Luna event and the bankruptcy of some cryptocurrency exchanges due to reserve management adversely affected the markets, ecosystem and investors. But all these experiences were also lessons for the ecosystem. All stakeholders have already learned the necessary lessons from the negatives. Therefore, these bad events will decrease day by day as the caries are cleaned and the ecosystem continues to develop. This dynamic market, which is still young, will continue to develop in order to become stronger in 2023.”