Standard Chartered says the price of bitcoin could drop to $5,000 next year. The bank’s analyst explained that cryptocurrencies could drop further and more crypto firms may “succumb to liquidity pressures and investor withdrawal.”
$5K Bitcoin Scenario from Standard Chartered Bank
Standard Chartered Bank published a note titled “Financial Market Surprises for 2023” on Sunday. The note outlines a number of possible scenarios in which “we feel markets remain depressed,” writes Eric Robertson, global head of research at Standard Chartered.
One scenario is that the price of bitcoin will drop to $5,000 next year, which is about 70% of its value. BTCThe current price of about $17,000.
Robertson in detail:
Yields are falling along with tech stocks, and while the bitcoin sell-off is slowing, the damage has been done. More and more cryptocurrency companies and exchanges are finding themselves lacking sufficient liquidity, leading to more bankruptcies and a collapse of investor confidence in digital assets.
The extreme scenarios outlined, the Standard Chartered analyst explained, “have a non-zero probability of occurring in the next year, and … fall effectively outside market consensus or our fundamental views.”
While noting that cryptocurrencies could “fall further” and more crypto companies may “succumb to liquidity pressures and investor withdrawal,” Robertson said gold could rally 30% to $2,250 an ounce and re-establish itself as a safe haven. Recipe:
Gold’s recovery in 2023 comes as stocks resume their bear market and the correlation between stock and bond prices turns negative.
Bitcoin has a downside risk of much greater than 70%. After this drop, Bitcoin will still be very expensive, so $5,000 will not be near the bottom.
Recently, a seasoned investor Mark Mobius He said that Bitcoin could drop to $10,000 next year as the Federal Reserve continues to raise interest rates and tighten monetary policy.
Do you think bitcoin will drop to $5,000 next year? Let us know in the comments section below.
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