Bitcoin BTC and cryptocurrencies are still reeling from the sudden collapse of crypto exchange FTX last month (with even the biggest bitcoin price bulls suddenly rowing back their predictions).
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The bitcoin price has found a floor at around $17,000 per bitcoin after collapsing from almost $70,000 late last year, causing fears the bitcoin and crypto industry could be “headed for oblivion.”
Now, after BlackRock’s chief executive revealed “the next generation for markets,” analysts at banking giant Standard Chartered have warned the bitcoin price could fall as low as $5,000 in 2023—a further 70% decline that would reduce the bitcoin market capitalization to around $100 billion and cause crypto chaos.
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The bitcoin price has so far failed to recover following a devastating price crash that’s wiped more … [+]
“Yields plunge along with technology shares, and while the bitcoin sell-off decelerates, the damage has been done,” Eric Robertsen, global head of research at Standard Chartered, wrote in a note first seen by CNBC titled “the financial-market surprises of 2023.”
Robertsen warned that further declines in technology company stock prices will cause the bitcoin price crash to accelerate, cascading into more crypto company bankruptcies.
Over the last month, the fallout from the spring collapse of the terraUSD stablecoin and its support coin luna finally hit the crypto industry, taking down the FTX exchange that appears to have deceived investors and defrauded users and plunging many smaller crypto companies into crisis.
“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,” Robertsen wrote, adding this isn’t necessarily the most likely scenario but a possibility currently being downplayed by the market consensus.
The “surprise” scenarios “have a non-zero probability of occurring in the year ahead.”
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The bitcoin price has crashed by around 70% over the last year with many issuing bearish 2023 … [+]
Bitcoin’s further price declines could coincide with a potential 30% increase in the price of gold, according to Robertsen, as “cryptocurrencies fall further and more crypto firms succumb to liquidity squeezes and investor withdrawals,” re-establishing gold as the ultimate safe haven from market volatility.
“The 2023 resurgence in gold [also] comes as equities resume their bear market and the correlation between equity and bond prices shifts back to negative,” Robertsen added.
A gold price surge has also been predicted by Saxo analysts in their annual “outrageous predictions,” forecasting the gold price could slice “through the double top near $2,075 as if it wasn’t there and hurtles to at least $3,000” in 2023.
“Any belief in a return to the disinflationary pre-pandemic dynamic is impossible because we have entered into a global war economy, with every major power across the world now scrambling to shore up their national security on all fronts; whether in an actual military sense, or due to profound supply-chain, energy and even financial insecurities that have been laid bare by the pandemic experience and Russia’s invasion of Ukraine,” Saxo chief investment officer Steen Jakobsen said via email.
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