The worsening macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on the price of Bitcoin this year.
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2022 was a rough year for cryptocurrency. More than $1.3 trillion in market value has been erased. Bitcoin, the world’s largest digital currency, has seen its price drop by more than 60%.
Investors have been caught off guard by a wave of industry crashes from the terraUSD stablecoin project to cryptocurrency exchange FTX, as well as the deteriorating macroeconomic climate. Those who predicted the price of bitcoin last year Really missed the mark.
But with 2023 almost upon us, some market players have been holding onto bids for what could be another volatile year.
Interest rates are rising around the world, and this is weighing on risky assets like stocks and Bitcoin. Investors are also watching how the FTX saga, which resulted in the arrest of company founder Sam Bankman-Fried in the Bahamas, will develop.
CNBC has rounded up some of the boldest bitcoin price calls of 2023.
Tim Draper: $250,000
Bitcoin bull Tim Draper had one of the most bullish calls on Bitcoin for 2022, predicting that 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 FTX crash, he is convinced the coin will reach a quarter of a million.
“I assume that given that 80% of retail spending is controlled by women, and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break,” Draper told CNBC via email.
Bitcoin would need to rally 1400% for it to trade at that level.
Despite the low prices and Dry trading volumesthere may be reason to suspect that the market has found a bottom, according to Draper.
“I think the halving in 2024 will have a positive start,” he said.
Half, or half, is An event that takes place every four years The Bitcoin rewards for miners are cut in half. Some investors see this as a positive for the Bitcoin price, as it puts pressure on supply. The next halving is scheduled to happen sometime in 2024.
Bitcoin miners, who use energy-intensive machines to verify transactions and mint new tokens, are under pressure from stagnant prices and rising energy costs.
These actors accumulate huge piles of digital currencies, which makes them some of the biggest sellers in the market. With miners offloading their holdings to pay off debt, that should remove most of the remaining selling pressure on Bitcoin.
This is a historically good sign for bitcoin, said Vijay Aiyar, vice president of corporate development at cryptocurrency exchange Luno.
“In previous bear markets, miner capitulation usually signals significant bottoms,” Ayat told CNBC. “Their cost of production is now greater than the value of bitcoin, and so you have a number of miners either shutting down their machines…or needing to sell more bitcoin to keep their business afloat.”
“If the market gets to a point where this miner selling pressure is sufficiently absorbed, one can assume we are in for a bottoming period.”
Standard Chartered: $5,000
For some market participants, the worst is yet to come.
In a December 5 research note, Standard Chartered said bitcoin It may reach $5,000. The prediction, one of the bank’s list of “surprises” being “down-priced” by the markets, would represent a 70% drop from current prices.
“Yields fall along with technology stocks” in Standard Chartered’s 2023 nightmare scenario, Eric Robertson, the bank’s global head of research, said, “And while bitcoin sell-off slows, the damage is done.”
He added, “More and more cryptocurrency companies and exchanges find themselves lacking sufficient liquidity, leading to more bankruptcies and a collapse of investor confidence in digital assets.”
The scenario has a “non-zero probability of occurring in the next year” and falls “materially outside the market consensus or our fundamental views,” Robertson said.
Mark Mobius: $10,000
Veteran investor Mark Mobius has had relative success in 2022 in terms of price. In May, he predicted bitcoin would drop to $20,000 when it was trading above $28,000.
He said that bitcoin will drop to $10,000 in 2022. But that hasn’t happened. However, Moebius he told CNBC He is holding on to the $10,000 price call in 2023.
The investor, who made his name at Franklin Templeton Investments, told CNBC that his bear case for bitcoin stems from higher interest rates and generally tighter monetary policy from the US Federal Reserve.
“As interest rates go up, the attractiveness of owning or buying bitcoins or other cryptocurrencies becomes less attractive because simply holding the currency does not pay interest,” Mobius said via email.
Carol Alexander: $50,000
Carol Alexander, a professor of finance at the University of Sussex, wasn’t far from reality with her prediction that bitcoin will drop to $10,000 in 2022.
Now, you think cryptocurrency can make gains – but not for reasons you might expect.
Alexander said the catalyst will be more dominos from the FTX fallout. If this happens, she expects bitcoin to reach $30,000 in the first quarter, and then $50,000 in three or four quarters.
“There will be a managed bull market in 2023, not a bubble – so we won’t see price overruns like before,” she told CNBC.
“We will see a month or two of stable trending prices punctuated by periods of limited range and possibly some short-term breakdowns.”
Alexander’s logic is that as trading volumes evaporate and traders are on edge, large angels known as “whales” are likely to step in to support the market. The top 97 bitcoin addresses account for 14.15% of the total supply, according to fintech firm River Financial.
Some investors have given up trying to predict the price of bitcoin. For Anthony Trenchev, CEO of cryptocurrency lending platform Nexo, the recent events are a sobering moment.
He said Bitcoin was on a “positive trajectory” earlier in 2022, with increasing institutional adoption, but that “some major forces have stepped in.”
Trenchev once predicted that bitcoin would peak at $100,000 by early 2023. Now, try to predict the price.
Laith Khalaf, financial analyst at AJ Bell, Proposed attempts to predict the Bitcoin price are futile.
“We could be sitting here talking this time next year and it could go to $5,000 or $50,000, and it wouldn’t surprise me because the market is so driven by sentiment,” he told CNBC.Squawk Box Europe.“
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