Adoption will be essential for any market recovery in 2023, particularly as IT companies onboard customers to blockchain technology.
Cumberland predicts that adoption will lead to a market rebound in 2023, but only after a brief period of volatility while the market “rewires itself.”
The firm’s head of trading, Jonah Van Bourg, anticipates an eventual uptrend in 2019 as a result of deregulation by China and Russia, which would increase bitcoin’s “geopolitical importance,” and the continuous use of blockchain technology by large IT firms.
“Price action is stabilising after a very active month,” Van Bourg stated in a long Twitter conversation. Given the nature of crypto and the seismic movements happening underneath it, we do not anticipate that this paradigm will last.
The fall of FTX and Terra drained loan markets of oxygen and expedited realignment with more sober values, according to the thread. “The future of the sector is as uncertain as ever,” he added, referring to the fact that firms throughout the industry have either scaled down their operations or gone out of business.
He said that the present relative pricing stability would not last. “In the aftermath of billions of dollars in liquidations and trillions of dollars in lost market capitalization, the next leg of price action will depend almost completely on whether there will be more firesales,” he added.
While Van Bourg acknowledges that a small number of portfolios will be liquidated in the coming months, he views a shortage of crypto as a greater threat than an excess.
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