Bitcoin could have a wild 2023. Lead researcher Matthew Sigel of mutual fund VanEck expects the price of Bitcoin to fall to $10,000 in early 2023 before rising by 300%.
Sigel shared an article on VanEck’s website with his 11 crypto expectations for 2023.
Bitcoin miners go out of business and sell BTC
According to Sigel, Bitcoin miners are currently not profitable and this could lead to many bankruptcies. Collapsed companies will want to sell their bitcoins shortly beforehand to raise money and save the ship, but this could take a major hit to bitcoin’s price.
“Bitcoin will test $10,000-$12,000 in the first quarter amid spate of miner failures, marking the bottom of the crypto winter.”
It also looks at the commercial value of these miners and how they are doing at the moment.
“The average market cap of the MVIS Global Digital Assets Mining Index is now just $180 million, with nearly all components burning cash and trading well below book value.”
The MVIS Global Digital Assets Mining Index tracks the performance of companies that derive at least half of their revenue from mining digital assets or activities related to the crypto mining ecosystem.
Bitcoin mining no longer profitable, possible drop to $10,000
As the price of Bitcoin has fallen, miners’ incomes have fallen so low that it is no longer profitable for many, Sigel says. “With bitcoin mining largely unprofitable due to higher electricity prices and lower bitcoin prices, we expect many miners to restructure or merge.”
It is not all doom and gloom, of course, a researcher in investment funds must be able to beat investors. He already said that the low will be between $10,000 and $12,000, so it can only go up.
End of inflation raises bitcoin price to $30,000
“Bitcoin could rise to $30,000 next year if inflation eases and that will prompt the central bank to ease monetary and fiscal policy.”
“Should our recessionary expectations materialize, the Federal Reserve will likely continue to hike interest rates while inflation eases as government money pressures and budget deficits continue.”
End of the war between Russia and Ukraine
In case you forgot, there is also a Russian invasion of Ukraine. This has directly and indirectly contributed to rising energy costs. Today it is hardly politically justifiable to be in favor of bitcoin mining, while ordinary people can hardly keep the light bulb on.
Sigel says the end of the war in Ukraine could cause energy prices to fall to normal levels, making Bitcoin mining more politically attractive.
“On the other hand, the war is also creating a more economically integrated Eurasia, with incentives to use new payment methods for cross-border trade, as Russia and China are doing with digital RMB and potential gold-to-oil swaps.”
Ripple loses and Bitcoin balances
There are two other interesting expectations we want to share. The first is that contrary to current consensus, Sigel expects Ripple to lose its lawsuit against the SEC. He justifies this by referring to the precedent of the lawsuit against LBRY.
He also expects at least one oil-exporting country to announce that it will add Bitcoin to its balance sheet by 2023. He alludes to Russia and Saudi Arabia.
Source: Btc Direct
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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.
