Bitcoin could plunge further by 70 per cent in 2023, Stanchart predicts

Bitcoin could fall much further in 2023, according to analysts at Standard Chartered. World’s biggest cryptocurrency could plunge about 70 per cent to $5,000 next year is among the “surprise” scenarios that markets may be “under-pricing,” the bank’s Global Head of Research Eric Robertsen wrote in a note on Sunday.

“Yields plunge along with technology shares, and while the Bitcoin sell-off decelerates, the damage has been done,” writes the bank’s head of global research Eric Robertsen.

Also read: Elon Musk’s Tesla offloads 75% of Bitcoin holdings

The prediction was made as part of Standard Chartered’s annual list of surprises that analysts believe the markets may be overlooking or under-pricing.

Gold may gain

Demand could switch from Bitcoin to gold, spurring to a 30 per cent rally in the yellow metal, Robertsen also said according to a Bloomberg report. The surprise market scenario of gold surging as crypto retreats could see the precious metal scale $2,250 an ounce, said Robertson.

Much of the bad news may already be reflected in a more than 60 per cent plunge in Bitcoin and a gauge of the top 100 tokens over the past year.

“Our base case is that most forced selling is over, but investors might not be compensated for the market risk incurred in the immediate term,” Sean Farrell, head of digital asset strategy at Fundstrat, wrote in a note Friday.

Farrell pointed to ongoing uncertainty surrounding Digital Currency Group, parent company of embattled crypto brokerage Genesis. Creditors to Genesis are seeking options to try to keep the brokerage from falling into bankruptcy.

Crypto retrench

The crypto sector continues to retrench. For example, digital-asset exchange Bybit is planning to cut its workforce by 30 per cent, the latest in a slew of layoffs to hit the industry.

Also read: Bitcoin plunges 70%, triggers panic in crypto world

More pain may lie ahead. Some 94 per cent of respondents to Bloomberg’s MLIV Pulse survey think that further blow-ups will follow the bankruptcy of FTX as years of easy credit give way to a tougher business and market environment.

Bitcoin for the moment is fairly steady. The largest virtual coin rose as much as 1.8% on Monday and was trading at a three-week high of about $17,340 as of 2:35 p.m. in Tokyo. Tokens such as Ether, Solana and Polkadot also gained.