The deteriorating macroeconomic climate and the collapse of industry giants like FTX and Terra have weighed on the price of bitcoin this year.
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2022 has been a tough year for crypto. Over $1.3 trillion has been wiped from market value. And bitcoin, the largest digital coin in the world, has seen its price drop by more than 60%.
Investors have been caught off guard by a wave of meltdowns across the industry, from stablecoin project terraUSD to crypto exchange FTX, as well as a worsening macroeconomic climate. Those Who Made Bitcoin Price Predictions Over the Past Year really missed the mark.
But with 2023 fast approaching, some market players have reached out with price calls for what could be another volatile year.
Interest rates around the world are on the rise, weighing on risky assets like stocks and bitcoin. Investors are also watching how the FTX saga, which culminated in the arrest of company founder Sam Bankman-Fried in the Bahamas, will unfold.
CNBC sums up some of the boldest price calls for bitcoin in 2023.
Bitcoin bull Tim Draper had one of the most bullish calls on bitcoin of 2022, predicting the token would be worth $250,000 by the end of the year.
In November, the billionaire venture capitalist said he was extending the timeline for that prediction until mid-2023. Even after the collapse of FTX, he is confident that the coin will reach the quarter million milestone.
“My hypothesis is that since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently owned by women, the dam is about to burst,” Draper told CNBC via e -mail.
Bitcoin would need to rally 1400% in order to trade at this level.
Despite the depressed prices and trading volumes are drying upthere could be reason to suspect that the market has bottomed out, according to Draper.
“I suspect the halving in 2024 will have a positive run,” he said.
The halving, or half, is a event that occurs every four years in which bitcoin rewards for miners are halved. This is seen by some investors as positive for the price of bitcoin, as it reduces the supply. The next halving is expected to take place in 2024.
Bitcoin miners, who use power-hungry machines to verify transactions and create new tokens, are being squeezed by falling prices and rising energy costs.
These players accumulate huge stacks of digital currency, making them one of the biggest sellers in the market. With miners unloading their holdings to pay off their debts, this should remove most of the remaining selling pressure on bitcoin.
This is historically a good sign for bitcoin, said Vijay Ayyar, vice president of business development at Crypto Exchange Luno.
“In past bear markets, miner capitulation has generally indicated major lows,” Ayyar told CNBC. “Their cost of production becomes higher than the value of bitcoin, therefore a number of miners shut down their machines…or they have to sell more bitcoin to keep their business afloat.”
“If the market reaches a point where it sufficiently absorbs this selling pressure from miners, it can be assumed that we are seeing a period of bottoming.”
For some market players, the worst is yet to come.
In a December 5 research note, Standard Chartered said bitcoin can drop as low as $5,000. The prediction, one of the bank’s “surprises” that are “undervalued” by the markets, would represent a 70% drop from current prices.
“Yields plunge with tech stocks” in Standard Chartered’s 2023 nightmare scenario, “and while Bitcoin selling slows, the damage has been done,” said Eric Robertsen, the bank’s global head of research.
“More and more crypto businesses and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets,” he added.
Robertsen said the scenario has a “non-zero probability of occurring within the next year” and falls “materially outside of market consensus or our own baseline views.”
Veteran investor Mark Mobius has had a relatively successful 2022 in terms of price call. In May, he predicted bitcoin would fall to $20,000 while trading above $28,000.
He said bitcoin would drop to $10,000 in 2022. That didn’t happen. However, Mobius told CNBC that it sticks to its price call of $10,000 in 2023.
The investor, who made a name for himself at Franklin Templeton Investments, told CNBC that his bearish case for bitcoin stemmed from rising interest rates and the general tightening of monetary policy by the US Federal Reserve.
“With higher interest rates, the allure of holding or buying Bitcoin or other cryptocurrencies becomes less attractive because simply holding the coin does not earn interest,” Mobius said. by email.
Carol Alexander, professor of finance at the University of Sussex, was not far off with her prediction that bitcoin would fall to $10,000 in 2022.
Now, she thinks cryptocurrency might be set for gains — but not for reasons you might expect.
The catalyst would be more dominoes from the FTX fallout swing, Alexander said. If that happens, she expects bitcoin price to top $30,000 in Q1 and then $50,000 in Q3 or Q4.
“There will be a managed bull market in 2023, not a bubble – so we won’t see the price break out like before,” she told CNBC.
“We will see a month or two of flat prices interspersed with range bound periods and probably some short-lived crashes.”
Alexander’s reasoning is that as trading volumes with end traders evaporate, large holders known as “whales” will likely step in to support the market. The 97 richest bitcoin wallet addresses account for 14.15% of the total supply, according to fintech firm River Financial.
Some investors have given up on predicting the price of bitcoin. For Antoni Trenchev, CEO of crypto lending platform Nexo, recent events are a sobering moment.
Bitcoin was on a “positive path” earlier in 2022, with institutional adoption on the rise, but “a few major forces have come into play,” he said.
Trenchev once predicted that bitcoin would hit a high of $100,000 in early 2023. Now he’s done trying to predict the price.
Laith Khalaf, financial analyst at AJ Bell, suggested attempts to predict bitcoin price are futile.
“We could be sitting here talking about this time next year and it could be $5,000 or $50,000, that just wouldn’t surprise me because the market is so heavily driven by sentiment,” he said. he told CNBC.Squawk Box Europe.“