Problems with cryptocurrencies may last all of 2023

Researchers at Coinbase Research predict that the cryptocurrency winter will last for several more months, and possibly until the end of 2023. According to analysts, despite the summer market crisis, the cryptocurrency industry has largely been unaffected by sharp fluctuations in cryptocurrency rates. However, the complicated relationship between the largest cryptocurrency exchange Binance and FTX quickly put an end to this and the cryptocurrency market faced a high level of instability. Experts suggest that the recent market turbulence and the lack of large investors investing in digital assets may prolong the already long cryptocurrency winter.

Coinbase analysts note the dominance of stablecoins in the market, which has grown to 18% of the total capitalization.

Given the number of bitcoins that are currently being withdrawn from exchanges, it is not surprising that Coinbase Research emphasizes the growth of volatility up to 66%. Prior to the problems with the FTX crypto exchange, the volatility of the BTC actually remained at the level of the last two years — as of the end of October, it reached 27%.

The rising energy costs and the depreciation of the HTS have created a difficult situation for bitcoin miners. The average price of electricity per kWh in the US is currently around $ 0.10, which means that the only operators in the US that are able to mine profitably are forced to use only the latest and most expensive equipment or look for a cheaper alternative to electricity.

Experts summarize that the events surrounding FTX have undoubtedly undermined investor confidence in digital assets. In addition, the tightening of regulatory policies in the United States has caused inflation for the rest of the world. The strengthening of the dollar has also made it difficult to hold long positions in cryptocurrencies. It will take a long time to resolve the situation at the global level, which may take the whole of next year.