The global financial system is under pressure in 2022, and the cryptocurrency market is no exception. Since the beginning of the year, its capitalization has fallen 2.6 times, amounting to $850 billion by December 20. The capitalization of bitcoin, the main cryptocurrency, which occupies almost 40% of the market, fell 2.8 times, to $316 billion (data as of December 20. — Approx. ed.).
Together with experts, we understand what will happen in the cryptocurrency market in Russia and the world in 2023, how regulation will change and whether digital financial assets have potential.
What awaits the cryptocurrency market in the world
Most likely, the bearish trend with minor periods of thaw will continue on the market, Dmitry Machikhin, founder of the BitOK service, believes. This means that new money in risky assets (which are cryptocurrencies. – Approx. ed.) simply has nowhere to come from, ”he says.
According to his forecast, the price of bitcoin may drop to 13-16 thousand dollars (now – 16.9 thousand dollars. – Approx. ed.). “Drawings below $10,000 are also possible,” he said.
A new round of growth for the crypto market may begin by 2024, the expert believes. “Many projects that were leaders in the past growth cycle will be able to wait out the crypto winter (a period of long decline. – Approx. ed.),” he says.
In turn, the head of InDeFi Smart Bank, Sergey Mendeleev, believes that it is difficult to predict a new period of growth for the crypto market. “The risks of stagflation have not gone away, and a recession in the global economy is almost inevitable. This creates a negative background for all world markets, including cryptocurrencies,” the expert notes.
However, regardless of the dynamics in the crypto market, a trend for decentralized stablecoins may develop, Mendeleev believes. “Already now, the total capitalization of dollar tokens is comparable to the capitalization of bitcoin and equal to ether, and the daily turnover exceeds the total turnover of cryptocurrencies,” he emphasizes.
In his opinion, the more global regulators put pressure on the market, the more liquidity will flow into smart contracts that allow issuing a stablecoin secured by cryptocurrencies and real assets. “The global trend is still aimed at strict regulation. In the US Congress, at hearings on FTX, they propose to equate crypto exchanges with casinos, with all the ensuing consequences for the industry, ”he notes.
Global regulators have indeed taken a course towards creating an effective regulatory framework commensurate with the risks of cryptocurrency, says Angelina Sevostyanova, corporate practice lawyer at Key Consulting Group. “All regulators want to slow down the continuous emergence of new crypto assets and establish a clear classification of cryptocurrencies, similar to how it is done in the securities market,” she notes.
At the same time, regulators are interested in taking advantage of modern technologies that underlie the cryptosphere, the lawyer believes.
What awaits the cryptocurrency market in Russia
In Russia, the market situation in 2023 will depend on the speed of adoption and the final text of the law on amending the federal law on DFA, which, according to the draft submitted to the State Duma, introduces legislative requirements for digital currency mining, Mendeleev believes.
In general, the structuring of the cryptocurrency sphere will take place, Sevostyanova believes. “Tidying is always seen as tightening the screws, but it’s more about building structure,” she says. Although some tightening is possible. This follows from the new version of the draft law on mining submitted to the State Duma, which states that advertising of digital currencies will be prohibited, as well as advertising of goods and services in order to organize the issuance of digital currencies, although such a ban is proposed to be excluded in relation to mining, the lawyer explains.
“At the federal level, the circulation of cryptocurrencies in Russia will be limited,” Machikhin suggests.
What awaits CFA in Russia
Machikhin sees no prospects for digital financial assets (DFA) due to the complexity of organizing their work. In his opinion, there will be no mass demand for them, except for the interest of several large issuers.
Sevostyanova, on the contrary, believes that interest in the DFA in Russia will grow, and the tool itself will develop and become standardized.
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We inform you that the Bank of Russia is in favor of introducing a ban on organizing the issuance and (or) issue, organization of circulation, exchange of cryptocurrencies (including crypto exchanges, crypto exchangers, P2P platforms) on the territory of the Russian Federation and establishing liability for violation of this ban. Cryptocurrency trading has a significant risk of complete depreciation in the event of a loss of user confidence in it and the loss of all invested funds.