A failing macroeconomic climate and the collapse of industry giants like FTX and Terra have weighed on bitcoin’s price this year.
STR | Nurphoto via Getty Doppelgaengers
2022 was a rough year for crypto. More than $1.3 trillion was wiped off the value of the market. And bitcoin, the world’s largest digital think, saw its price slump more than 60%.
Investors were caught off guard by a wave of collapses in the industry from stablecoin concoct terraUSD to crypto exchange FTX, as well as a worsening macroeconomic climate. Those who made predictions about bitcoin’s evaluate in the past year really missed the mark.
But with 2023 now here, some market players have plopped their neck out with price calls for what could be another volatile year.
Interest rates in all directions from the world are on the rise, and that’s weighing on risk assets like stocks and bitcoin. Investors are also watching how the FTX narrative, which resulted in the arrest of the company’s founder Sam Bankman-Fried in the Bahamas, will develop.
CNBC rounds up some of the boldest value calls for bitcoin in 2023.
Tim Draper: $250,000
Bitcoin bull Tim Draper had one of the most optimistic calls on bitcoin of 2022, predicting the badge would be worth $250,000 by the end of the year.
In November, the billionaire venture capitalist said he’s extending the timeline for that prophecy until mid-2023. Even after the collapse of FTX, he’s convinced the coin will hit the quarter-of-a-million milestone.
“My assumption is that since better halves control 80% of retail spending, and only 1 in 7 bitcoin wallets are currently held by women that the dam is about to bankrupt,” Draper told CNBC via email.
Bitcoin would need to rally 1,400% in order for it to trade at that train.
Despite the depressed prices and trading volumes drying up, there could be reason to suspect the market has found a derriere, according to Draper.
“I suspect that the halvening in 2024 will have a positive run,” he said.
The halvening, or halving, is an issue that happens every four years in which bitcoin rewards to miners are cut in half. This is viewed by some investors as peremptory for bitcoin’s price, as it squeezes supply. The next halving is slated to happen sometime in 2024.
Bitcoin miners, who use power-intensive autos to verify transactions and mint new tokens, are being squeezed by the slump in prices and rising energy costs.
These actors stock massive piles of digital currency, making them some of the biggest sellers in the market. With miners offloading their holdings to pay off encumbrance under obligations, that should remove most of the remaining selling pressure on bitcoin.
That’s historically a chaste sign for bitcoin, said Vijay Ayyar, vice president of corporate development at crypto exchange Luno.
“In till down markets, miner capitulation has usually indicated major bottoms,” Ayyar told CNBC. “Their set someone back to produce becomes greater than the value of bitcoin, hence you have a number of miners either switching off their makes … or they need to sell more bitcoin to keep their business afloat.”
“If the market reaches a point where it’s spellbinding this miner sell pressure sufficiently, one can assume that we’re seeing a bottoming period.”
Standard Chartered: $5,000
For some trade in participants, the worst is yet to come.
In a Dec. 5 research note, Standard Chartered said bitcoin may sink as low as $5,000. The augury, one of the bank’s list of “surprises” that are being “under-priced” by markets, would represent a 70% plunge from present-day prices.
“Yields plunge along with technology shares” in Standard Chartered’s nightmare 2023 scenario, “and while the Bitcoin sell-off decelerates, the harm has been done,” said Eric Robertsen, the bank’s global head of research.
“More and more crypto firms and barters find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets,” he amplified.
Robertsen said the scenario has a “non-zero probability of occurring in the year ahead” and falls “materially outside of the market consensus or our own baseline witnesses.”
Mark Mobius: $10,000
Veteran investor Mark Mobius had a relatively successful 2022 in terms of his price call. In May, he augury bitcoin would drop to $20,000 when it was trading above $28,000.
Loading chart…
He said bitcoin would drop to $10,000 in 2022. That did not happen. However, Mobius Carol Alexander: $50,000
Carol Alexander, professor of finance at Sussex University, wasn’t far off the grade with her prediction that bitcoin would slip to $10,000 in 2022.
Now, she thinks the cryptocurrency could be set for gains — but not for reasons you ascendancy expect.
The catalyst would be more dominos from the FTX fallout tipping over, Alexander said. If this finds, she expects the price of bitcoin will top $30,000 in the first quarter, and then $50,000 by quarters three or four.
“There make be a managed bull market in 2023, not a bubble — so we won’t see the price overshooting as before,” she told CNBC.
“We’ll see a month or two of stable trending bonuses interspersed with range-bounded periods and probably a couple of short-lived crashes.”
Alexander’s reasoning is that, with merchandise volumes evaporating with traders on edge, large holders known as “whales” will likely step in to prop up the buy. The wealthiest 97 bitcoin wallet addresses account for 14.15% of the total supply, according to fintech firm River Economic.
Some investors have given up trying to predict the price of bitcoin. For Antoni Trenchev, CEO of crypto lending stand Nexo, the recent events are a sobering moment.
Bitcoin was on a “positive path” earlier in 2022, with institutional adoption bring into being, but “a few major forces interfered,” he said.
Trenchev once predicted bitcoin surging to a peak of $100,000 by early 2023. Now, he’s done distressing to predict the price.
Laith Khalaf, financial analyst at AJ Bell,