Bitcoin risks plummeting by another 70% to $5,000 come next year, according to Eric Robertson, the Global Head of Research at Standard Chartered Bank.
In a Sunday statement, the pundit, also the bank’s chief strategist, warned of bitcoin pulling the “surprise move” come 2023, catching investors who believe the crypto market has bottomed unaware. The plunge could be caused by stringent interest rate hikes and more crypto “bankruptcies and a collapse in investor confidence in digital assets,” Robertsen added.
He further noted that a drop in Bitcoin’s price was likely to spur investor interest in physical gold, driving the precious metal’s price up by roughly 30% to $2,250 an ounce or more.
Robertson’s comments come even as Bitcoin continues to retrench on the back of a crypto winter spin-out caused by the collapse of FTX and its sister trading firm Alameda Research last month. Although the banker stressed that he wasn’t making predictions but intimating scenarios materially outside of current market consensus, he expressed concerns over tremors spreading from the FTX debacle toppling more crypto companies and crypto prices in 2023.
Despite Bitcoin plunging below $15,500 on the news of FTX’s liquidity crunch and its continued weakness as more crypto firms capitulate, concerns about the future of major crypto lending firms have continued to threaten the cryptocurrency’s price growth.
Recently, reports have emerged that crypto broker Genesis and its parent company Digital Currency Group (DCG), owe Gemini customers $900 million. On Saturday, the Financial Times reported that the Winklevoss twins’ helmed crypto exchange was trying to recover the funds “after Genesis was wrongfooted by last month’s failure of Sam Bankman-Fried’s FTX crypto group.” Moreover, apart from halting crypto withdrawals and loan applications last month, reports have emerged that Genesis may have issued bulk unsecured loans raising fears that it could be next in line to bite the dust.
Furthermore, according to Robertson, the continued retrenchments in the crypto sector could also point towards tough days ahead. Recently, leading firms, including crypto exchanges Kraken, Coinbase and Bybit, have announced plans to conduct significant lay-offs due to poor market conditions.
BTCUSD Chart by TradingView
That said, despite the negative outlook, Bitcoin has remained relatively steady, with prices oscillating between $17,250 and $16,900 in the past five days. As of writing, the leading cryptocurrency by market capitalization was trading at $16,988 after a 1.74% drop in the past day. Notably, BTC has managed to lift off by 4.37% in the past week, according to CoinMarketCap data.