Jeff Dorman, chief investment officer at Arca, believes that digital assets will largely decouple from traditional equity markets in 2023.
Dorman discussed his outlook for 2023 in a recent interview with Cointelegraph, where he said that with the global economy entering a recession this year, stocks will be negatively affected while some cryptocurrencies will do well. He explained that the value of the latter is determined not only by macroeconomic factors but also by their usefulness within their respective ecosystems, which would remain unchanged in a recession.
“You’re going to see a lot of stocks penalized under the weight of restructurings, under the weight of lower revenues and lower cash flows,” Dorman said. “And you will actually see a lot of tokens doing really well.”
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However, the process of separating cryptocurrency from stocks may not involve Bitcoin
, which Dorman believes will remain closely linked to stock markets due to their high sensitivity to macro factors such as global liquidity and interest rates.
“Bitcoin just became a 24/7 VIX. It’s just a trading vehicle now for large funds that want to get in and out of risk on weekends and overnight trading hours,” Dorman stated.
For more on Dorman’s crypto predictions for 2023, check out the full interview on Cointelegraph’s YouTube channel, and don’t forget to subscribe!