Bitcoin According to analysts at Standard Chartered, further declines are still possible next year.
The world’s first and largest cryptocurrency could plummet to as low as $5,000 in a scenario imagined by the banking group, as the bursting of a “crypto bubble” has ramifications in the future. throughout 2023.
The bank’s head of global research wrote: “Yields tumbled along with tech stocks and while the Bitcoin sell-off slowed, the damage was done.” Eric Robertson.
The prediction comes as part of Standard Chartered’s annual list of surprises that analysts believe the market may be ignoring or undervaluing.
Other possible headwinds next year include falling oil prices, US President Joe Biden’s impeachment and falling food prices.
This list, now in its eighth edition, is not intended to predict highly probable events but to consider non-zero likelihood situations that are not currently part of the market consensus.
If many crypto companies and exchanges find themselves short of cash, the report says, investor confidence in crypto assets could collapse and send people back to safe havens. Classic is gold.
As part of this scenario, gold could spike 30%. The precious metal isn’t getting much love in 2022, down 20% from its March high, but could benefit from a drop in confidence in cryptocurrencies.
Bitcoin Follows Broader Tech Decline
Standard Chartered also sees the possibility of a large-scale downturn in technology stocks, even exceeding the plunge many companies have made this year.
The value of companies on the Nasdaq 100 has fallen about 25% throughout 2022, but analysts have compared this to an even larger drop seen in the dot-com crash of the early years. , suggesting that further declines are likely.
Bybit, Swyftx join list of crypto companies to cut workforce
The researchers wrote that such a decline could be related to woes in the crypto sector.
“Perhaps repeating the contraction in the digital asset sector, next-generation tech companies will see an increase in the number of bankruptcies by 2023,” they said.
Meanwhile, early-stage companies may find it more difficult in this situation to obtain funding due to rising financing costs and shrinking liquidity.
