The deteriorating macroeconomic climate and the collapse of industry giants reminiscent of FTX and Terra have affected the price of bitcoin this 12 months.
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2022 has been a difficult 12 months for cryptocurrencies. Greater than $1.3 trillion has disappeared from the market. Bitcoin, the world’s largest digital coin, has seen its price fall by greater than 60%.
Investors were surprised by a wave of collapses within the industry from the terraUSD stablecoin project to the FTX cryptocurrency exchange, in addition to the deteriorating macroeconomic climate. Those that predicted the price of bitcoin last 12 months really missed the mark.
But now that we’re in 2023, some market players are sticking their necks out with price calls for one other volatile 12 months.
Rates of interest around the globe are rising, which is taking a toll on dangerous assets like stocks and bitcoin. Investors are also watching because the FTX saga unfolds, which led to the arrest of company founder Sam Bankman-Fried within the Bahamas.
CNBC rounds up a few of the boldest Bitcoin price calls in 2023.
Tim Draper: $250,000
Bitcoin bull Tim Draper had some of the optimistic bitcoin calls of 2022, predicting the token can be price $250,000 by the top of the 12 months.
In November, the billionaire enterprise capitalist said he was extending the timeline for that forecast to mid-2023. Even after the collapse of FTX, he’s confident that the coin will pass the quarter-million mark.
“I assume that since women control 80% of retail spending, and just one in 7 bitcoin wallets are currently owned by women, the dam is about to burst,” Draper told CNBC by email.
Bitcoin would wish to rise 1,400% to trade at this level.
Despite the reduced prices and trading volumes are drying upin accordance with Draper, there could also be reason to suspect that the market has bottomed out.
“I believe that halving in 2024 can have a positive development,” he said.
Halving or halving is an event that takes place every 4 years where bitcoin mining rewards are halved. That is seen by some investors as positive for the bitcoin price because it limits supply. The next halving is scheduled for 2024.
Bitcoin miners, who use energy-intensive machines to confirm transactions and mint recent tokens, are oppressed by falling prices and rising energy costs.
These actors amass huge piles of digital currency, making them one in every of the largest sellers out there. As miners offload their holdings to repay debts, this could remove many of the remaining pressure to sell bitcoin.
It is a historically good sign for bitcoin, said Vijay Ayyar, vice chairman of corporate development at cryptocurrency exchange Luno.
“In earlier bear markets, miners’ capitulations tended to point big bottoms,” Ayyar told CNBC. “Their cost of production becomes greater than the worth of their bitcoins, so many miners either shut down their machines…or must sell more bitcoins to maintain their business going.”
“If the market reaches a degree where it’s sufficiently absorbing the pressure from the miners, it may possibly be assumed that we’re seeing a bottom period.”
Standard Chartered: $5,000
For some market participants, the worst is yet to return.
In a December 5 research note, Standard Chartered said bitcoin could drop as little as $5,000. The forecast, one in every of the bank’s list of “surprises” which can be “undervalued” by the markets, can be a 70% drop from current prices.
“Annuities are falling with tech shares” in Standard Chartered’s nightmare scenario for 2023, “and while the Bitcoin sell-off slows, the damage has been done,” said Eric Robertsen, the bank’s global head of research.
“Increasingly more crypto corporations and exchanges have insufficient liquidity, resulting in further bankruptcies and a breakdown in investor confidence in digital assets,” he added.
Robertsen said the scenario has a “non-zero probability of occurring in the approaching 12 months” and is “significantly beyond market consensus or our own basic views.”
Mark Mobius: $10,000
Veteran investor Mark Mobius had a comparatively successful 2022 when it comes to asking price. He predicted that bitcoin would fall to $20,000 in May while its price is above $28,000.
He said bitcoin will drop to $10,000 in 2022. It didn’t. Nevertheless, Mobius told CNBC that it’s sticking to its $10,000 price in 2023.
The investor, who made his mark with Franklin Templeton Investments, told CNBC that his bearishness for bitcoin was as a consequence of rising rates of interest and the US Federal Reserve’s general tightening of monetary policy.
“At higher rates of interest, the attraction of owning or buying Bitcoin or other cryptocurrencies becomes less attractive because just holding the coin doesn’t earn interest,” Mobius said via email.
Carol Alexander: $50,000
Carol Alexander, a professor of finance on the University of Sussex, wasn’t far behind in her prediction that bitcoin would fall to $10,000 in 2022.
Now he believes that cryptocurrency might be arrange for profits – but not for the explanations one might expect.
Alexander said the catalyst can be more dominoes from the falling FTX fallout. If that happens, he expects the price of bitcoin to top $30,000 in the primary quarter after which $50,000 within the third or fourth quarter.
“2023 might be a managed bull market, not a bubble – so we can’t see a price jump like before,” she told CNBC.
“We’ll see a month or two of stable trending prices interspersed with periods of limited ranges and possibly a number of short-lived crashes.”
Alexander’s reasoning is that as trade volumes decline and traders are on edge, big holders generally known as “whales” are prone to step in to support the market. Based on fintech company River Financial, the 97 richest bitcoin wallet addresses account for 14.15% of the overall supply.
Some investors have given up attempting to predict the price of bitcoin. For Antoni Trenczew, CEO of cryptocurrency lending platform Nexo, recent events are a sobering moment.
Bitcoin was on a “positive track” in early 2022 as institutional adoption surged, but “several major forces stepped in,” he said.
Trenchev once predicted that bitcoin would rise to a peak of $100,000 in early 2023. Now he’s finished predicting the price.
Laith Khalaf, a financial analyst at AJ Bell, suggested that attempts to predict the price of bitcoin are futile.
“We might be sitting here talking about this time next 12 months and it might be $5,000 or $50,000, it just would not surprise me since the market is so heavily driven by sentiment,” he told CNBC’s Squawk Box Europe.