Standard Chartered Bank says the price of bitcoin could fall to $5,000 next year. The bank’s analyst explained that crypto-currencies could fall further and more crypto-currency companies could “succumb to liquidity squeeze and investor withdrawals.“
Standard Chartered Bank’s scenario for $5,000 bitcoin.
Standard Chartered Bank published a note on Sunday titled “The financial-market surprises of 2023“. The note outlines a number of possible scenarios that “we believe are being undervalued by the markets,” wrote Eric Robertsen, global head of research at Standard Chartered.
One of those scenarios calls for the price of bitcoin to fall to $5,000 next year, which would represent a drop of about 70 percent from the previous year. The current price of BTC is about $17,000.
Returns plunge along with tech stocks, and while bitcoin’s sell-off decelerates, the damage is done. More and more crypto exchanges and companies are running out of cash, leading to more bankruptcies and a collapse in investor confidence in digital assets.
The Standard Chartered analyst said the extreme scenarios described “have a non-zero probability of occurring over the coming year, and … are materially outside the market consensus or our own basic views.“
While noting that crypto-currencies could “fall further“and that more crypto-currency companies could “Succumb to liquidity crunches and investor withdrawals“, Robertsen said gold could rally as much as 30% to $2,250 an ounce and become a safe haven again. He described:
Gold’s resurgence in 2023 comes as stocks resume their bear market and the correlation between stock and bond prices turns negative again.
Commenting on Standard Chartered Bank’s prediction of a $5,000 bitcoin price, economist Peter Schiff reiterated his prediction of a likely Bitcoin collapse. He tweeted Monday:
Bitcoin’s downside risk is much higher than 70%. After such a drop, bitcoin will still be overvalued, and $5,000 won’t even be close to the bottom.
Recently, investor Mark Mobius said that bitcoin could fall to $10,000 next year as the Federal Reserve continues to raise interest rates and tighten monetary policy.