Tim Draper, under of Draper Associates, onstage at the Web Summit 2022 tech conference.
Ben McShane | Sportsfile via Getty Images
Venture capitalist Tim Draper weighs bitcoin will hit $250,000 a coin by the middle of 2023, even after a bruising year for the cryptocurrency marked by effort failures and sinking prices.
Draper previously predicted that bitcoin would top $250,000 by the end of 2022, but in early November, at the Web Apex tech conference in Lisbon, he said it would take until June 2023 for this to materialize.
He reaffirmed this contention Saturday when asked how he felt about his price call following the collapse of FTX.
“I have extended my prediction by six months. $250k is serene my number,” Draper told CNBC via email.
Bitcoin would need to rally nearly 1,400% from its in the know price of around $17,000 for Draper’s prediction to come true. The cryptocurrency has plunged over 60% since the start of the year.
Digital currencies are in the doldrums as tighter money policy from the Fed and a chain reaction of bankruptcies at major industry firms including Terra, Celsius and FTX have put animated pressure on prices.
FTX’s demise has also worsened an already severe liquidity crisis in the industry. Crypto exchange Gemini and lender Genesis are in the midst the firms said to be impacted by the fallout from FTX’s insolvency.
Last week, veteran investor Mark Mobius rebuked CNBC that bitcoin could crash to $10,000 next year, a more than 40% plunge from in the know prices. The co-founder of Mobius Capital Partners correctly called the drop to $20,000 this year.
Nevertheless, Draper is convinced that bitcoin, the elated’s largest cryptocurrency, is set to rise in the new year.
“I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to enhance relics,” he told CNBC.
Draper, the founder of Draper Associates, is one of Silicon Valley’s best-known investors. He made flush bets on tech companies including Tesla, Skype and Baidu.
In 2014, Draper purchased 29,656 bitcoins impounded by U.S. Marshals from the Silk Road dark web marketplace for $18.7 million. That year, he predicted the price of bitcoin would go to $10,000 in three years. Bitcoin be disposed ofed on to climb close to $20,000 in 2017.
Some of Draper’s other bets have soured, however. He invested in Theranos, a salubriousness startup that falsely claimed it was able to detect diseases with a few drops of blood. Elizabeth Holmes, Theranos’ author, has been sentenced to 11 years in prison for fraud.
‘The dam is about to break’
Draper’s rationale for bitcoin’s breakout next year is that there stay puts a massive untapped demographic for bitcoin: women.
“My assumption is that, since women control 80% of retail assign and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break,” Draper said.
Crypto has long had a gender unevenness problem. According to a survey conducted for CNBC and Acorns by Momentive, twice as many men as women invest in digital assets (16% of men vs. 7% of spouses).
“Retailers will save roughly 2% on every pay for made in bitcoin vs dollars,” Draper added. “Once retailers realize that that 2% can double their profits, bitcoin wish be ubiquitous.”
Payment middlemen such as Visa and Mastercard currently charge fees as high as 2% each nevertheless credit cardholders use their card to pay for something. Bitcoin offers a way for people to bypass the middlemen.
However, using the digital currency for everyday spending is tough, since its price is very volatile and the coin is not widely accepted as currency.
“When people can buy their provisions, clothing and shelter all in bitcoin, they will have no use for centralized banking fiat dollars,” Draper said.
“Executives of fiat is centralized and erratic. When a politician decides to spend $10 trillion, your dollars become importance about 82 cents. Then the Fed needs to raise rates to make up for the spend, and those arbitrary centralized resolves create an inconsistent economy,” he added. Fiat currencies derive their worth from their issuing domination, unlike cryptocurrencies.
Meanwhile, the next so-called bitcoin halving — which cuts the bitcoin rewards to bitcoin miners — in 2024 leave also boost the cryptocurrency, according to Draper, as it chokes the supply over time. The total number of bitcoins that inclination ever be mined is capped at 21 million.