2023 Crypto Assets Market Outlook

The cryptocurrency market was severely impacted in 2022, primarily influenced by two major factors: global interest rate hikes and internal industry events. The rate hikes put pressure on global assets, including Crypto Assets, while the collapse of a large exchange caused a tremendous shock to the market. This event exposed the trust issues associated with centralized exchanges and prompted industry institutions to seek solutions, including promoting a more transparent trading ecosystem, developing decentralized exchanges, and strengthening compliance.

Regarding the issues of a certain large Crypto Assets company, it currently seems unlikely that the situation will further deteriorate to the point of forcing a large-scale sale of its Bitcoin assets. This means that there is temporarily no risk of large-scale liquidation triggered by this.

Regarding Ethereum, its foundation has confirmed that the Shanghai upgrade will proceed as scheduled in March, even if it requires postponing other functionalities to ensure timely completion. This upgrade will address the long-standing liquidity issues associated with staking, injecting a boost into the market. Historical experience shows that the Ethereum foundation often chooses favorable macro environments when making significant strategic decisions, so March could be an important time node.

In addition, several Layer 2 projects based on ZK technology have announced plans to launch testnets or mainnets in the third or fourth quarter of 2023. These internal industry factors suggest that a significant market downturn driven by events is unlikely to occur in the coming year.

From a cyclical perspective, Bitcoin is about 470 days away from the next halving. If historical patterns repeat, a new round of market trends may begin to sprout by the end of this year. At the same time, the Crypto Assets market cycle typically exhibits characteristics of short bull markets and long bear markets. The current bear market has lasted for over a year and may soon come to an end.

In summary, the most difficult period for the Crypto Assets market may have passed, and it is currently in a stage of restoring confidence, seeking new narratives, and consolidating. Looking ahead to 2023, it is expected that a wave of market hotspots may emerge in the second quarter, and another wave of trends may arrive in the fourth quarter.

Unless an extreme black swan event occurs or the external environment deteriorates rapidly, the bottom of this round of Crypto Assets market may have already appeared. A more intense upward trend is expected in 2023. I hope that in the new year, everyone can maintain strong faith and reap happiness!