Why 2023 will be worse than 2022 for crypto, experts say – Business AM

After a year 2022 that will have seen most of them cryptos see their value skyrocket, 2023 shouldn’t be much better.

Why is this important?

with bankruptcy of FTX, investors lost faith in crypto and pulled their marbles out of the game. The entire sector has suffered, the market capitalization of the sector has fallen by more than 65% from the levels reached in November 2021 and Bitcoin and Ethereum lost more than 60% in 2022.

News: Two major scenarios, particularly related to FTX, are likely this year, according to experts who spoke to The insider.

1. FTX infection can lead to more bankruptcies and lawsuits

  • Fedor Muegge, a partner at blockchain venture capital firm 369 Capital, said The insider that the industry has yet to fully see the FTX or Terra and Luna explosions. “We haven’t even begun to really explore FTX and its corporate network yet. Further work on this topic and investigations into other recent events, such as the Terra case, may lead to further legal action,” Muege said.
  • “The infection takes a long time to fully emerge, and we expect there will still be some dominoes falling in 2023. That said, we’re already seeing a renewed commitment to building better and better solutions.” reliable in the world. space and we expect this trend to be a central theme of 2023,” explained Phil Wirtjes, chief strategist at digital asset trading platform Enclave Markets. The insider.

2. Heavy losses and industry-wide liquidations

  • “Lawsuits and bankruptcies will continue for many years. Even today, coins from the 2014 Mt.Gox bankruptcy await distribution,” said Tegan Kline, CBO and co-founder of software developer Edge & Node. The insider. “The biggest outstanding situation right now is DCG, Genesis and Grayscale and we’re waiting to see what happens there. »
  • “The imminent fall of Genesis has been a concern for some time, as most of its assets are held by US hedge funds, and the market has already adjusted to this news,” says Andrei Grachev, managing partner of DWF Labs, a maker of digital asset markets. He added : “While the collapse may not have a major impact on the industry as a whole, it marks the end of an era as DCG, long feared to be the last domino to fall, finally succumbs.”
  • Genesis cut 30% of its staff on Thursday, a company spokesman said, still at The insider, with sales and business development teams hardest hit by the cuts. Gemini, the cryptocurrency exchange that provided funding to Genesis for its interest-bearing product, is trying to recover $900 million (which belonged to their customers, editor’s note) from the troubled company. There could be huge losses and liquidations across the industry if a major company like Genesis or its parent company DCG were to file for bankruptcy.

Essential: the case was the first domino whose chain reaction will not end

  • The bankruptcy of FTX caused the dispute, which became public, between Gemini and Genesis resulting in another scandal in the crypto world.
  • Experts fear that this Genesis case will cause further bankruptcies and scandals throughout the cryptocurrency world.
  • These other scandals and other bankruptcies further reduce the monetary values ​​of cryptos.
  • However, they remain optimistic about the use of Blockchain technology and the decentralization of information by banks.

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