Analysts at Standard Chartered are predicting that the star cryptocurrency, Bitcoin, could lose about 70% of its value in 2023 and see its price drop to $5,000.
At the time of this prediction, CNBC which reported it, mentioned that 1BTC was equal to $17,000. And while this prediction may seem wild, consider that Bitcoin price was at over $49,000 this time a year ago.
In addition, the bank is not just making claims but saying that the wipe off could occur at certain market conditions. Eric Robertsen, global head of research at Standard Chartered Bank, called the conditions ‘extreme scenarios’ but said they have a non-zero probability of occurring.
“Yields plunge along with technology shares, and while the Bitcoin sell-off decelerates, the damage has been done. More and more crypto firms and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets,” Robertsen said in his address.
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Also, he mentioned that if Bitcoin price fell continuously in 2023, it could lead to a rally in gold of about 30%, marking it up to $2,250 per ounce. As of when this article was published, an ounce of gold cost a little over $1,800.
“The 2023 resurgence in gold [also] comes as equities resume their bear market and the correlation between equity and bond prices shifts back to negative,” he added.
However, he clarified that the scenarios fall outside of the market consensus or even Standard Chartered’s baseline views.
Standard Chartered is not alone in making gloomy predictions for Bitcoin’s future, Mark Morbius predicted a somewhat safer outcome for the crypto in 2023, saying that it would fall to $10,000. Although, Morbius’ prediction comes from observing rising interest rates and tighter policies from the US Federal Reserve.
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