This is why crypto prices could be set for a sustained rally in 2023

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Source: Unsplash/Maxim Hopman

The cryptocurrency market saw a 1% gain in the past 24 hours, with its total cap hitting $894 billion. This represents an increase of 6.5% over the past two weeks, signaling hope that the market may have moved on after a difficult 2022.

There’s no doubt that the last year hasn’t been great when it comes to the short history of crypto, with Terra and FTX collapsing and prices plummeting by 64%. However, aside from the fact that the market has rallied a bit in recent days, various macro indicators suggest that 2023 could bring more sustained recoveries.

Not only is inflation slowing in various countries and employment rising, but bond yields – particularly those on US Treasuries – suggest that interest rates will peak below 5% this year, which is lower than what some analysts feared. This is very good news for speculative risk assets such as bitcoin and cryptocurrency, which could spend much of this year correcting the losses of its predecessor.

Why Crypto Prices Could Be Set For A Sustained Rally In 2023

Explaining why bonds currently offer good news for risky investors, fixed income manager Jeffrey Gundlach argued that they provide a more reliable indicator of future interest rates than indexes and informal comments from policymakers. the Federal Reserve.

Speaking in a webcast on Tuesday, DoubleLine Capital’s CIO said, “My over 40 years of experience in finance strongly advises investors to watch what the market is saying rather than what the Fed is saying.”

Right now, the market is saying that the Fed’s base rate may not rise much more than its current level, which is between 4.25% and 4.5%. Indeed, Treasury yields are actually trading below the Fed’s official range, with even the two-year note ending slightly below 4.25% yesterday.

In other words, the market doesn’t buy and sell higher-rate bonds because it doesn’t believe, on average, that the Federal Reserve will actually raise its own rates. She doesn’t see the need to compete with rates of 5% or more, as she doesn’t believe the Fed’s official rates will rise this year.

This implies that the US central bank could start cutting rates again as 2023 progresses, which will be bullish for risky assets such as cryptocurrencies. Indeed, lower rates make higher-yielding assets more attractive to investors, partly because bonds won’t offer such high yields, and partly because lower rates signal an expanding money supply. .

Improving the macroeconomic situation

In turn, investors should expect rising cryptocurrency prices. Of course, it also depends on other macro factors, with the war in Ukraine and rising inflation dragging everything from bitcoin to tech stocks into 2022.

Fortunately, there are signs that the situation may be slowly improving. Inflation in the United States has fallen for two consecutive months, falling to 7.1% in November from a peak of 9.1% in July. That was helped by lower oil prices, with U.S. crude oil falling to just over $73 last week from a 13-year high of $130 in March.

Falling prices weaken the case for higher interest rates, while shrinking economic activity strengthens the case for lower rates. Contractions have been seen in many major economies in recent weeks, with the US services sector contracting for the first time in two and a half years in December.

So now that the Fed and other central banks around the world have reined in inflation growth, they could start reversing direction as 2023 matures, particularly if economic activity continues to slow. Reductions in GDP have already been seen in the UK and China (in manufacturing), with other major countries predicting similar moves (eg Germany and France).

It is therefore becoming very likely that central banks will begin to act to revive economic growth. Again, this implies lower interest rates and – by extension – an expanding money supply, with more money meaning more investment and speculation.

This includes investments in cryptocurrencies. Of course, it’s hard to say how much digital currencies such as bitcoin will gain this year, but with many losing 65% to 90% in 2022, the returns could be substantial.

Needless to say, this will take time. But with inflation falling and bond yields remaining low, it looks like the long process of economic transition has only just begun.

New Altcoins Could Benefit the Most

When the next bull market arrives, new altcoins are likely to benefit more than established cryptocurrencies such as bitcoin and ethereum. In particular, tokens that are currently holding their pre-sales may be some of the biggest winners, given that they are starting from such a small base.

Even with last year’s bear market, some pre-sale tokens saw massive gains after first listing. For example, Tamadoge (TAMA) is up 1800% from its pre-sale price in October, while Lucky Block (LBLOCK) is up 6000% from a sale price of $0.00015 .

The three coins below are currently holding their respective token sales, each offering the kinds of fundamentals that should help them enjoy successful listings. This will especially be the case if they enter during a broader market rally.

Meta Masters Guild (MEMAG)

One of the newest and most exciting projects in the cryptocurrency ecosystem, Meta Masters Guild is a mobile-focused gaming guild for the Web3 industry and play-to-win. Based on the Ethereum network, its platform will create many blockchain-based games with playable NFTs, while paying rewards in its native MEMAG token, which can also be staked and traded.

Started late last year, its pre-sale is currently priced at 1 MEMAG for $0.007, though this will increase in the next leg of the sale, which begins in just over nine days. The selloff is expected to have seven legs in total, with the seventh leg setting a price of 1 MEMAG at $0.023.

The sale will have a supply of 350,000,000 MEMAG, which will fetch around $4,970,000 if they are all sold. This equates to 35% of MEMAG’s total maximum supply of 1 billion, with 50% vesting for at least three years before it can be sold.

Visit Meta Masters Guild Now

Fight (FGHT)

Fight Out (FGHT) is an Ethereum-based platform that combines real-world workouts with Web3. Unlike previous M2E apps, it will track and reward a much wider range of workouts, including boxing, weightlifting and yoga, while also offering a range of integrated and IRL classes at its own branded gyms.

Its token sale opened in December and has already raised over $2.8 million, with 1 FGHT currently selling for $0.0166. The sale is expected to end in the second quarter of 2022, when it will first be listed and when its app launches.

Visit Fight Out now

C+Load (CCHG)

Running on BNB Chain, C+Charge (CCHG) is a peer-to-peer payment network for electric vehicle (EV) charging stations, which went on presale in December. Its main goal is to use blockchain and cryptography to expand access to carbon credits, with its native CCHG to be used within its network by EV owners to pay to charge their vehicles.

Additionally, C+Charge will also reward users with NFT-based carbon credits for charging their electric vehicles at its stations, motivating people to go green. It has also already signed partnerships with Flowcarbon and with Perfect Solutions Turkey, adding 20% ​​of EV chargers in Turkey to its network.

Given such early growth, this is another new platform in a strong position to have a successful 2023.

Visit C+Charge now

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