In an annual look ahead to what the markets might have in store for 2023, chief strategist at Standard Chartered (LON:STAN) Eric Robertsen outlined some dour predictions for benchmark digital asset bitcoin (BTC).
According to Robertsen’s crystal ball, crypto firms and exchanges could “find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets,” leading to a further 70% fall in BTC prices.
Against today’s market value, this scenario would cause a plummet to US$5,000, a price not seen since April 2019.
Thankfully these are less genuine forecasts and more speculation on potential “black swan” events, but if anything the comments show just how low the coin has fallen in institutional firms’ estimations.
Robertsen’s grim scenario is not without justification, given BTC has fallen 60% in 2022 to date, not to mention the bloody trail of collapsed cryptocurrencies the market has carved out.
In contrast to his portentous bitcoin ruminations, Robertsen sees a possible upside to gold – the precious metal kind that is – in 2023.
Robertsen outlined a scenario where “gold makes a staggering recovery in 2023, rallying 30% to over US$2,250 an ounce as cryptocurrencies fall further and more crypto firms succumb to liquidity squeezes and investor withdrawals.
“Gold sees a surge in demand from retail and institutional investors, as well as sovereign nations looking to shore up their reserves”.
Gold has certainly been less volatile than BTC this year; the commodity’s current spot price of US$1,791 (£1,460) represents a 12% discount to yearly highs seen in March.
Is bitcoin (BTC) digital gold?
Bitcoin (BTC) was once thought of as ‘digital gold’, i.e. a store of value and inflation hedge.
But recent events have all but wiped that narrative out, creating something of a definitional crisis for bitcoin, for if BTC isn’t a currency not a store of value, where does it sit in the pantheon of alternative investments?
Regardless of what bitcoin fundamental is, not all commentators are as bearish as Robertsen.
Despite the collapse of FTX sending prices plummeting, billionaire venture capitalist and former president of the Export-Import Bank of the United States Tim Draper clings to the hope that BTC will hit US$250,000 in 2023.
If anything, FTX’s bankruptcy could work in bitcoin’s favour.
“FTX was centralized, reliant on a single founder… I think this fiasco is going to bring on a lot more Bitcoin maximalists,” Draper told Cointelegraph.
A tantalising prospect, but undoubtedly wishful thinking.