Standard Chartered Predicts Bitcoin Could Fall to USD 5,000

Standard Chartered Predicts Bitcoin Could Fall to USD 5,000

Standard Chartered Bank has predicted that the price of bitcoin could drop to USD 5,000 next year. The bank’s analyst explained that cryptocurrencies could fall further and more crypto firms could "succumb to liquidity squeezes and investor withdrawals."

Financial Market Surprises and Possible Scenarios

Standard Chartered Bank published a report titled "The Financial Market Surprises of 2023" on Sunday. The report outlines several possible scenarios that "we feel are underpriced by the markets," wrote Eric Robertsen, global head of research at Standard Chartered.

One of the scenarios is bitcoin’s price dropping to USD 5,000 next year, which would be about a 70% drop from BTC’s current price of around USD 17,000.

Robertsen explained:

"Yields plunge along with technology shares, and while the bitcoin sell-off decelerates, the damage has been done. More and more crypto firms and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets."

The Standard Chartered analyst clarified that the extreme scenarios outlined "have a non-zero probability of occurring in the year ahead, and fall materially outside of the market consensus or our baseline views."

Gold Could Rally Up to 30%

Cryptocurrencies could "fall further," and more crypto firms could "succumb to liquidity squeezes and investor withdrawals." Robertsen said gold could rally as much as 30% to USD 2,250 per ounce and re-establish itself as a safe haven. He described:

"The 2023 resurgence in gold comes as equities resume their bear market and the correlation between equity and bond prices shifts back to negative."

Commenting on Standard Chartered Bank’s USD 5K bitcoin price outlook, gold bug and economist Peter Schiff reiterated his prediction that BTC has much further to fall. He tweeted on Monday:

"Bitcoin has far more downside risk than 70%. After such a drop, bitcoin will still be significantly overpriced, so USD 5,000 will be far from the bottom."

Recently, veteran investor Mark Mobius said that bitcoin could fall to USD 10,000 next year as the Federal Reserve continues to hike interest rates and tighten monetary policy.

However, some people are still optimistic about the price of bitcoin. Venture capitalist Tim Draper, for example, has doubled down on his BTC price prediction of USD 250,000 by the middle of next year.

Do you think bitcoin will drop to USD 5,000 next year? Please post your comments.