Crypto Rebounds in 2023, Will the Market Be Hurt by Geopolitical Tensions?
Soon after 2023 kicked off, a number of Wall Street firms stated that the U.S. will enter a recession. Meanwhile, in the crypto market, though prices have picked up, the impact of DCG, which is a ticking time bomb, remains unknown. Despite that, overall, the market might be significantly affected by macro policies in 2023. Of course, geopolitical tensions might also lead to market swings. For the crypto space, the economic cycle may present growth opportunities.
As we all know, the world has become an arena for superpowers, but fundamentally, what we are witnessing is a switch between technological cycles. During the previous tech cycle, the U.S. was the biggest winner. During those years, the country maintained low inflation and interest rates, which helped the U.S. stock market record robust growth. However, in the current tech cycle, we do not yet know who the winner will be. Despite that, the major categories of the race are clear, including semiconductors, new energy, blockchain, etc.
To be more specific, the world is going through globalization in reverse because after the market had reached a certain level of maturity, the tech utilization rate peaked and the profit margins fell; meanwhile, countries with tech dominance aggressively protect their existing technologies, which results in conflicts with nations seeking tech breakthroughs. Moreover, this is also one of the indirect reasons why U.S. Internet companies took a plunge in the stock market and decided to implement substantial layoffs.
However, the race in fields such as semiconductors and new energy requires both software and hardware breakthroughs. As such, their development is subject to the impact of some objective factors. Meanwhile, blockchain-based crypto assets emphasize the upgrade and innovation of software. Moreover, their unique features will allow the financial sector to register fast growth, which is why crypto might become the next category of superpower competition. Of course, given its scale and applications, crypto will only be a tiny part of the macro race between superpowers.
The shift in Hong Kong’s attitude toward crypto informs us of some details in relation to the race among superpowers, and the transition might turn Hong Kong into a major channel for investors in mainland China to access crypto. Moreover, during the recent period, the market has picked up: the BTC price exceeded $18,000, the ETH price reached $1,300, and the total market cap of crypto hit $870 billion.
Over the past year, when investing in crypto, we could feel the visible impact of U.S. financial policies on the crypto market. As for the forecast of the U.S. economy in 2023, most market players are hawkish because the country’s CPI has not met their expectations. Some institutions have even predicted that there is a 50% probability that the Fed may raise the federal interest rate to 6% this year.
In light of that, the crypto market might not be able to bounce back soon. Yet, for retail investors, this is a great time to stock up on cryptos. In the short term, the market will remain volatile, but from a long-term perspective, the market might thrive after the macroeconomic conditions improve, as evidenced by the shift in the attitude toward crypto in some countries and regions.
In today’s crypto market, we must remain rational when predicting future growth. In particular, you should not blindly rush to trending categories; otherwise, you’ll eventually “buy the rumor, sell the fact”. When investing in a bear market, remember to avoid popular categories and projects because overheat is not what it takes to achieve long-term success despite market changes. After all, sometimes investors would rather be vaguely right, than precisely wrong.
Therefore, when choosing a crypto trading platform, we should look for exchanges that have recorded sound growth after the bull-to-bear transition, as well as platforms that share our personal values and visions. Thanks to its solid performance, CoinEx has stood out from peers during the crypto bear and made it to 2023, its sixth year in the blockchain space. Last year, the CoinEx team upgraded the exchange’s brand slogan to “Making Crypto Trading Easier”. During face-to-face conversations, members of the team told me that CoinEx was born to remove the shackles of conventional finance, make crypto trading more accessible, and evolve into a major gateway for global crypto enthusiasts to the crypto world.
Some choose to preach their beliefs, while others practice their visions. Over the years, CoinEx has kept improving its products and services, which earned the recognition of over 4 million users across more than 200 countries and regions. So, stop hesitating, and join the crypto world through CoinEx now!
Disclaimer: No investment advice is provided in this article, and all data mentioned herein are for reference only. You should not rely on the information provided herein to make any investment decision, and you will be fully liable for your own investment decisions.