2022 has been a brutal year for Bitcoin, after a surge of positivity in 2021, this year was marked not only by a constant fall of the entire market, but also by several collapses of key companies and projects that ultimately left the industry with uncertainty and concern fulfilled. This makes predictions for the future of the currency less optimistic.
That’s according to a recent report from CNBC, banking analysts Standard chartered warned that Bitcoin could fall to $5,000 next year and that many investors are unprepared for this possibility because they underestimate the asset’s selling pressure.
In an analytic note sent to your customers entitled “the surprises of the financial market in 2023”, Standard Chartered has outlined a number of possible scenarios that it believes are being underestimated by the market as a whole.
For the bank, the damage to the crypto market has already been done, with the recent drop in technology stocks along with financial sector returns, and the insolvency crisis of several exchanges being a very worrying factor.
“Returns plummeted along with technology stocks, and while Bitcoin’s sell-off is slowing, the damage is already done. More and more companies and cryptocurrency exchanges are running out of liquidity, leading to more bankruptcies and a collapse in investor confidence in digital assets,” said Eric Robertsen, global head of research at Standard Chartered Bank, in the Sunday note.
Bitcoin could fall further and reach $5,000
The news highlights that in 202 Bitcoin’s value fell by 60%, largely caused by a series of collapses by several companies, such as FTX, which not only filed for bankruptcy and hurt thousands of people, but also created a domino effect that spread it still by the market.
For Robertson, Bitcoin’s fall will have a major aggravating factor going forward: gold’s recovery. The two factors together could cause investment interest in Bitcoin to fall even further.
The analyst believes gold could rise 30% and hit the US$2,250 an ounce mark.as cryptocurrencies plummet and more and more cryptocurrency companies succumb to liquidity restrictions and withdrawals.
“The Revival of Gold in 2023 [também] occurs when stocks resume their bear market and the correlation between stock and bond prices turns negative again,” he added.
With this drop in interest, we can see Bitcoin losing space in investors’ portfolios and having a price drop as a result.
Source: Live Coins
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
