Zipmex predicts crypto rebound in 2025
published : 27 Jan 2023 at 07:16
newspaper section: Business
writer: Nareerat Wiriyapong
The likelihood of an economic recession this year could delay the recovery of the digital asset industry by another year to 2025, says a source from Asian crypto exchange Zipmex, noting the recent surge in prices could be short-lived.
The source, who requested anonymity, said digital assets typically follow a four-year cycle, but a rebound in the crypto market could be pushed back from 2024 if a recession occurs.
"The industry this year should be quite similar to last year, with a recovery projected for 2024. But things could change if there is a recession, which is likely," said the source.
"In that scenario, people would have lower purchasing power, meaning they will have less money to trade or invest. This could delay the recovery until 2025."
Zipmex Thailand, which has Singapore's Zipmex Asia Pte as a major shareholder, faced scrutiny over the past six months after Babel Finance, a Hong Kong-based crypto lender, was found to have lost roughly US$280 million worth of Bitcoin and other tokens through failed proprietary trading of customers' assets.
Zipmex hired Babel Finance to operate and manage the investments.
The issue affected withdrawals from the Bangkok-based exchange's ZipUp and ZipUp+ programmes, offered since October 2020, which allow customers to earn returns on their tokens.
The Thai Securities and Exchange Commission has been probing whether Zipmex breached local rules in offering certain digital asset products.
Media reports have also hinted the crypto exchange could be taken over by V Ventures, a subsidiary of Thoresen Thai Agencies Plc, for $100 million, according to a person familiar with the matter.
The Zipmex source said the recent jump in the price of Bitcoin is unlikely to be sustainable as the market's fundamentals have not changed.
"Prices rose steeply and quickly the past two weeks from $17,000 to $23,000. I was surprised because none of the economic indicators have changed. Both inflation and interest rates remain high," said the source.
"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, it is better to keep cash to spend for necessities."