Bitcoin Could Slump to $5,000 in 2023: Standard Chartered.
Consumer banking corporation Standard Chartered believes the popular Bitcoin could drop to $5,000 next year. This could mark a 70% plunge from the current price of $17,000 per coin.
Standard Chartered, in a note “The Financial-Market Surprises of 2023”, highlighted a number of possible scenarios that it feels are under-priced by the markets. Eric Robertsen, the global head of research at Standard Chartered Bank, said yields will drop along with technology shares. He outlined that while the Bitcoin sell-off decelerates, the damage has been done.
The bank says more and more crypto firms and exchanges find themselves with insufficient liquidity. This will lead to further bankruptcies and a collapse in investor confidence in digital assets. In extreme scenarios, Robertsen said there is a non-zero probability in the year ahead. There would be a fall materially outside of the market consensus or Standard Chartered’s own baseline views.
In 2022, Bitcoin has already plunged more than 60% following a string of high-profile falls of projects and companies with the latest being Sam Bankman-Fried’s FTX. Contagion from FTX’s collapse has spread throughout the crypto market like wildfire. Standard Chartered’s note said the drop in BTC’s price will coincide with a rally in gold. Robertsen outlined that the precious metal could rally 30% to $2,250 per ounce as cryptocurrencies fall further and more crypto firms succumb to liquidity squeezes and investor withdrawals.
Robertsen believes gold could re-establish itself as a safe haven. Investors will turn to gold for stability in times of market volatility. The expert said the resurgence in gold in 2023 will come as equities resume their bear market and the correlation between equity and bond prices shifts back to negative.