Researchers of the South Korean cryptocurrency exchange Bithumb identified seven factors they believe will affect the prices of Bitcoin (BTC) and cryptocurrencies in 2023 and determined whether the bear market will give way to an uptrend for an extended period.
Bithumb researchers have said that the price of Bitcoin could reach $42,000 in the next 12 months, if certain events occur.
According to Asia Today, the predictions have been published in a document titled Virtual Asset Market Outlook 2023published by the Bithumb Institute of Economic Research.
The company rated each factor with a star rating out of four, with four stars denoting an event of utmost importance to the market. It also categorized the events as bearish, unknown, neutral or bullish.
Four star bullish events
Bithumb has identified two potential bullish events that could push the BTC price towards $42,000. The first is the imminent decision of the Federal reserve bank (FED) to ease “austerity measures”. The second is Russia’s decision whether or not to allow its commercial companies to use cryptocurrencies as a means of settlement in cross-border transactions.
Observers are widely expecting the FED to cut interest rates later this year, a move that many experts say will encourage investment in the cryptocurrency sector and spark a sustained recovery for major crypto-assets.
Russia, meanwhile, has been barred from trading dollars in most markets. But cryptocurrency trade deals could be an alternative for Moscow, despite some uncertainties at the central bank level, which remains crypto-skeptical.
Three star bullish events
Two other events could have a significant impact on cryptocurrency prices, Bithumb researchers explain. These include a possible easing of cryptocurrency tax rates in Japan, which could trigger a bull market across Asia.
Tokyo has indicated that it will review tax rates on legal entities that issue and hold cryptocurrencies. A measure to reduce the tax burden on individual investors could be more problematic, but opposition MPs have repeatedly called on the government to change its stance.
Another country to watch is Brazil, where plans to give cryptocurrencies a greater legal footing could also revive sagging Latin American markets.
An “unknown” factor.
Bithumb researchers said it was unclear what the outcome of the lawsuit will look like between the Securities and Exchange Commission (SEC) and Ripple would affect the markets. But that lawsuit was rated a three-star event, indicating the court’s decision would affect pricing one way or another.
A significant “neutral” event?
The first major Ethereum network update of the year, “Shanghai”, is expected to happen in March. The hard fork will allow validators to withdraw the ether (ETH) holdings they have staked to secure the network. While Bithum analysts believe this will not necessarily push the market higher or lower, the event could have a stabilizing effect.
And maybe that’s why the team rated the hard fork a three-star event.
A bearish event
It seems likely that the refund of exchange users Mount Gox will finally take place this year, with March cited as the most likely month. This would essentially mean 140,000 BTC would be “released into the market” starting in March, with payments continuing until the end of September.
“Because it is difficult for creditors to predict when assets will be sold, caution is warranted,” the researchers said. This factor has been rated as a two-star bearish event.
Prospects for Bitcoin in 2023
Lee Mi Sunhead of the research group at the Bithumb Economic Research Institute, said that if the conditions are right and “clearer” crypto regulations are put in place, “more countries and institutions will be able to integrate virtual assets into their portfolios this year . “
But he warned that the price outlook could be impacted if unexpected variables emerge. Lee said these variables could include a decline in usage of the Bitcoin network due to “the emergence of new alternative assets.”
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