Bitcoin could hold an unpleasant “surprise” for investors
Major Cryptocurrency Could Plunge 70% Next Year From Fallout From FTX Exchange Collapse, Standard Chartered Warns
Bitcoin’s price could drop to $5,000 next year in a market surprise for investors, multinational bank Standard Chartered said, as quoted by Decrypt, a website that covers cryptocurrency.
The prediction was made as part of an annual list of possible scenarios that the UK-based banking group thinks markets could ignore.
“Yields Plunge With Tech Stocks, And As Bitcoin Selling Slows, The Damage Has Been Done,” Eric Robertsen, global head of research at Standard Chartered, said in a note to clients seen by media. “More and more crypto businesses and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets.”
The analyst noted that somewhat extreme scenarios “have a non-zero probability of occurring in the coming year, and … are materially outside the market consensus or our own baseline views.”
Bitcoin’s price drop could coincide with a rally in gold, Robertsen said — potentially 30% to $2,250 an ounce — “As cryptocurrencies fall further and more crypto businesses succumb to liquidity shortages and investor withdrawals.”
The Standard Chartered analyst said gold could once again become a safe haven as investors flock to the commodity for stability amid market volatility.
Bitcoin has already plunged more than 60% this year after a series of high-profile meltdowns in the cryptocurrency space, and in particular the bankruptcy of major crypto exchange FTX. The FTX fallout contagion has been rippling through the market lately, shaking investor confidence in the crypto.
On Wednesday, Bitcoin was trading at around $16,800 per coin.
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