A British bank expects Bitcoin to fall below $5,000

Bitcoin is in a difficult test with the crises of the trading platforms (Getty)

The British “Standard Chartered” bank expected the price of the most popular cryptocurrency, “Bitcoin”, to drop to $5,000 over the next year, a decrease of about 70% from its levels recorded on Monday, which exceeded $17,000.

In a note issued Sunday titled “Financial Market Surprises for 2023,” the bank outlined a number of possible scenarios regarding cryptocurrency trends.

Eric Robertson, head of global research at the bank, said the extreme scenarios have a non-zero probability of occurring in the next year.

According to CNBC, Robertson said in the note that more cryptocurrency companies and exchanges are finding themselves lacking sufficient liquidity, leading to more bankruptcies and a collapse of investor confidence in digital assets.

He also added that the decline in the price of “Bitcoin” will coincide with the rise of gold, which is expected to rise 30% at $ 2250 an ounce, with the continued decline in cryptocurrencies, and more cryptocurrency companies surrendering to liquidity pressures and the withdrawal of investors.

“Going forward, gold will benefit from cryptocurrency woes, with a sudden downturn in confidence in the crypto ecosystem,” said Nicholas Vrabel, global head of institutional markets at Australian precious metals refiner ABC, in a note to clients.

In addition, about 94% of respondents to the “MLIV Pulse” survey, conducted by “Bloomberg”, believe that more setbacks will follow the bankruptcy of “FTX”, as years of easy credit give way to a tougher business and market environment.

Despite its stability near its highest level in nearly a month, and its distance from its lowest price in nearly two years, investors in “Bitcoin” and most cryptocurrencies still see the current recovery as insufficient to feel reassured, and to start forming new positions, especially in In light of the continued blowing of headwinds against most of the main dealers in the industry.

Bitcoin rose 2% in the past 36 hours to $17,300, crossing the important $17,000 mark, to trade at the highest levels since the shocking and painful bankruptcy of cryptocurrency exchange FTX, which shook the markets early last month.

Bitcoin continues to trade at a price not exceeding a quarter of its all-time high, which was recorded in late 2021.

And in the middle of this year, the correlation of cryptocurrencies with the stock market strengthened, especially with regard to the relationship with inflation rates and interest rate levels in the United States.

With the Federal Reserve heading to ease the pace of interest rate hikes starting next week, as hinted by Fed Chair Jerome Powell, cryptocurrency investors are starting to return to hope for a new dawn, after a year of darkness.

“Over the coming weeks, if inflation is trending steadily lower and the economy appears to be doing well, risky assets, including Bitcoin, may take on the rise from here.”

Moya stresses, however, that “it will remain difficult to see a rally across all risk assets, until the full implications of the FTX collapse and contagion to other stablecoin strains become clear.”

He adds, “It’s a long way back to prices above $20,000, but market signals support the continuation of the recent slow and steady rise from November’s lows near $15,500.”

“If Bitcoin continues to stabilize, the rally could be capped at $21,500,” Moya emphasized.

Bitcoin was trading at about $21,000 per unit before the sudden collapse of the FTX platform, which had painful effects on most sectors of the cryptocurrency industry, which necessitated an uprising from regulators in many markets.

BlockFi, the cryptocurrency exchange and lender, recently filed for bankruptcy and protection from creditors, in what was seen as an FTX-related business meltdown, and digital assets continue to live a precarious present as traders make their decisions day by day, as events unfold in the broader markets.

On the other hand, some go too far in their optimism, albeit in the long term, as Tim Draper, a specialist in venture capital, confirmed in an interview with the “CNBC” news channel, that he still expects the value of ” Bitcoin” to $250,000, although it recently moved the deadline for that price target to June 2023 instead of the end of 2022.

Draper’s expectations mean an increase of more than 1,300% from current levels, to a price equal to four times the highest level the most famous cryptocurrency was traded in in its history.

Leave a Comment