The possibility of an economic recession this year is expected to cause delays in the recovery of the digital assets industry by at least a year or in 2025 yet.
A source from the Asian crypto exchange Zipmex, however, said that the recent surge in prices could only be short-lived.
“I believe the increase will only last for a short time. Investors who bought Bitcoin at a low price can take profit now and hold cash as a recession is looming. We don’t know what is going to happen, but if the recession is serious, its is better keep cash to spend for necessities,” said the source, who requested anonymity.
The source from Zipmex said that digital assets normally follow a four-year-cycle. But the rebound in the crypto market could be pushed back from 2024 to 2025 if a recession occurs.
According to the same source, the industry this year is somewhat similar to last year, with a recovery projected in 2024. But some changes are inevitable if a recession happens, which is very likely.
When there is a recession, people would normally have lower purchasing power. This means that they will have less money to trade or invest.
Given this kind of a scenario, the source said that delays in the recovery of digital assets may be expected in 2025 yet.
Meanwhile, Zipmex Thailand, which has Singapore’s Zipmez Asia Pte as a major shareholder, has been facing scrutiny in the past six months after Babel Finance, a Hong Kong-based crypto lender, was found to have lost roughly $280 million worth of Bitcoin and other tokens through failed proprietary trading of customers’ assets.
The company hired Babel Finance to operate and manage the investment.
The controversy has affected withdrawals made from Bangkok-based exchange’s ZipUp and ZipUp+ programmes.
Both programmes, that were offered since October 2020, allow customers to earn returns on their tokens.
A probe is now being conducted by the Thai Securities and Exchange Commission to determine if Zimpax also breached local rules in offering certain digital assets products.
News reports hinted that the crypto exchange could be taken over by V Ventures, a subsidiary Thoresen Thai Agencies Plc, for $100 million.
The source from Zipmex said prices rose steeply and quickly from $17, 000 to $23, 000 in the past two weeks, which came as a surprise because none of the economic indicators have changed.
Both inflation and interest rates remain at a high level, the source added.
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