Standard Chartered: Bitcoin to Slump to $5k in 2023
- Analysts at Standard Chartered predict darker times for the crypto industry in 2023 and a greater decline for Bitcoin.
- However, crypto enthusiasts have different predictions, with some expecting BTC to hit the $100k mark.
Despite having had one of its worst runs in over a decade, analysts at Standard Chartered believe Bitcoin could slump lower in 2023. The banking group painted a picture where the oldest cryptocurrency dropped as low as $5000.
As first reported by Bloomberg, Standard Chartered’s Chief Strategist Eric Robertsen, in a note to investors, highlighted the possibility that a decline in Bitcoin’s value might be associated with a rise in the price of actual gold. Robertson presented potential scenarios for 2023 that might result in interest rate reductions, more crypto business bankruptcies, and unfavourable market sentiment.
The prediction was included in Standard Chartered’s yearly list of potential shocks that analysts think the market may be ignoring or undervaluing. Other shockers on the list include a decline in oil prices, Joe Biden’s impeachment as president of the United States, and a plunge in food costs. Standard Chartered also highlighted the potential for a severe decline in IT stocks, which it expects to be worse than the hammering many tech companies have already experienced this year.
The listing, which is currently in its eighth edition, is meant to take into consideration circumstances that have a non-zero probability of occurring but are not currently part of the market consensus.
The overall cryptocurrency ecosystem has experienced instability in the final months of 2022. Amidst price slumps and bankruptcies, Sam Bankman-Fried’s FTX, one of the biggest exchanges at the time, collapsed, wiping out billions of dollars in user funds.
The collateral impact from FTX’s bankruptcy proceedings has already been felt by cryptocurrency lender BlockFi. The platform recently filed for bankruptcy as a result of its substantial exposure to FTX and Alameda.
According to the analysis, investor confidence in crypto assets might crash if more crypto businesses and exchanges have cash flow problems, driving people back to the traditional safe haven of gold. In this case, gold’s value might increase by 30%. Although the price of the yellow metal has declined 20% from its March highs, it may still profit from negative sentiments in the crypto market.
However, crypto enthusiasts have offered conflicting predictions for the market in 2023. Tim Draper, a well-known venture capitalist and blockchain investor, predicted that Bitcoin will reach $250,000 next year, stressing his conviction that the FTX debacle would promote greater adoption for Bitcoin, user self-custody and decentralization.
As of this writing, Bitcoin trades at $16,984.70.
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