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A wild ride in 2023? Here are the big predictions

Posted:Jan 18, 2023 10:42 Category: Crypto , Payments , Regulatory , Posted by Content Team

Crypto was the big loser of 2022. Terra Luna ended up worthless, Celsius went bankrupt and FTX’s founder SBF was arrested and charged with fraud. This time last year, Bitcoin was sitting at a comfortable $46,000. Now it’s around a third of that valuation.

Even die-hard Bitcoin investors have had their spirits dampened. Many are hopeful of a comeback in 2023, while others are expecting more crashes even worse than those witnessed last year. As is customary, some are even saying Bitcoin will disappear forever.

Regardless, it’s safe to say crypto does not follow the normal market playbook. So predictions are all over the place. Let’s look at the high-profile calls for Bitcoin’s price in 2023.

The good

The most optimistic Bitcoin call comes from none other than long-time crypto supporter Tim Draper, who revised his $250,000 prediction for mid-2023. Ever the optimist, Draper believes the market has not hit retail – where women control 80% of spending. Tim expects women to drive adoption in the next cycle.

Founder of Altana Digital Currency Fund, Alistair Milne, is predicting Bitcoin’s price will fly to $45,000, depending on what happens with inflation. Speaking on Twitter, he said he is “basically [all-in] again” and argued Bitcoin will once again prove its resilience this year.

The two cite the next 2024 halving as a key factor in 2023’s performance. This is where supply constraints for Bitcoin come in as mining rewards halve – a process which happens approximately every four years. Notably, Litecoin – often referred to as the Silver to Bitcoin’s gold – will have its event take place in August 2023. Post-halving, the amount of coins in circulation decrease and counteracts fiat inflation.

Milne suggests Bitcoin could reach prices of around $300,000 by the end of 2024, and said “this was no time to be bearish”. Draper expects his twitter prediction will “certainly [happen] before the halvening”. It goes without saying that bitcoiners will be keeping a watchful eye on these predictions in the months ahead.

Meanwhile, finance professor at Sussex University, Carol Alexander, has called for a $30,000 Bitcoin price in the first half of 2023, with prices eventually reaching $50,000 by the year-end. Last year, she predicted Bitcoin would bottom at $10,000 – not too far off the mark (if BTC has bottomed that is). Some take her predictions as gospel truth.

Her claims are buttressed by a group of mysterious whales who own roughly 15% of the entire Bitcoin supply, according to BitInfoCharts. These whales have the potential to step in and save the day, should the market need it.

Arcane Assets CIO, Eric Wall, has said Bitcoins $15,400 price ‘was the bottom’, and expects prices will ‘pump above $30k’. So there’s a mixture of high flying predictions with uncharacteristically steady growth expectations, either of which would be a relief for those who watched their portfolio plummet in 2022.

The bad

Of course, not everyone is bullish on Bitcoin – otherwise there would be nobody left to buy. Billionaire founder of Mobius Capital Partners, Mark Mobius said in early December that he expects Bitcoin to bottom at $10,000 in 2023. He says that the Federal Reserve’s tightening policy will push the crypto to these lows.

In 2022, he predicted that BTC would drop to $20,000 when prices hit $28,000 in May. Consequently, many are taking the veteran investor’s dire prediction as a sign the winter isn’t over.

VanEck Investments echoed similar sentiment. In fact, the head of digital assets research Matthew Sigel says the first quarter will see Bitcoin hit $10-$12,000. He cites high energy prices and Ripple’s lawsuit with the SEC as key drivers for this outcome.

While not outright predicting calamity, legendary investor Dr. Michael Burry has said that inflation has not peaked. “We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut and government will stimulate. And we will have another inflation spike,” Burry tweeted.

In other words, more investors could sell their assets and place more pressure on the market. Central-bank-induced inflation has wreaked havoc on risk assets in 2022, and according to bears it’s not over. Only time will tell if these predictions come true.

The ugly

Consumer bank Standard Chartered expects Bitcoin to fall to $5,000. Eric Robertsen, the bank’s head of research made the call in December, writing: “More and more crypto firms and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets.”

He said it might not be good for those who already have skin in the game, but it will be a good buying opportunity for those looking to get into Bitcoin while the prices are very low.

Robertsen says there’s no reason to run for the hills yet, however. Standard Chartered included this as part of their ‘surprise’ forecasts for markets in 2023. The prediction “[falls] materially outside of the market consensus or our own baseline views.”

Unsurprisingly, the European Central Bank – which is very keen on launching its CBDC at an opportune moment  – was even harsher with its predictions. ECB executives said 2022 volatility was the final nail in the coffin for the crypto in November – incidentally marking the local bottom. Ulrich Bindseil and Jürgen Schaaf argued “it is an artificially induced last gasp before the road to irrelevance – and this was already foreseeable before FTX went bust and sent the bitcoin price to well below $16,000.”

But the piece is chalk-full of handwaving, making this prediction more of a hopium call than anything else. Bitcoin adoption among users is on a steady rise, and many more would argue that the best is yet to come for the entire crypto sector.

Whichever side ends up being correct, one thing is clear: 2023 is certainly going to be another rollercoaster ride.

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