Neither the author, Ruholamin Haqshanas, nor this website, The Tokenist, provide financial advice. Please consult our website policies before making any financial decisions.
Bitcoin could lose another 70% and crash to as low as $5,000 by next year, according to Standard Chartered’s list of possible scenarios that markets could be undervalued. The bank also speculated that investors could flock to gold, with a potential 30% rally for the yellow metal in the making.
A “surprising” Bitcoin scenario that the markets are undervalued
In a note on Sunday, Eric Robertsen, Standard Chartered Bank’s global head of research, spoke about a possible Bitcoin scenario that markets haven’t paid much attention to. The scenario calls for the flagship cryptocurrency to fall to $5,000 in 2023, losing another 70% from its current levels.
This could lead to an increase in appetite for gold and fuel a 30% rally in the yellow metal. However, for this possible outcome to become a reality, more crypto “busts and a collapse in investor confidence in digital assets” should occur, as well as a reversal in rate hikes as economies struggle, Robertsen added.
Earlier this month, FTX filed for Chapter 11 bankruptcy after failing to secure emergency funding. The collapse had a severe impact on the entire industry, especially as the exchange was seen as one of the strongest crypto companies, even earning a reputation as crypto’s rescue king during the recent crypto meltdown.
More importantly, FTX contagion has already brought down some other crypto companies. As reported, cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy late last month after freezing withdrawals a day before FTX filed for bankruptcy.
Similar to BlockFi, both Genesis Global Trading’s crypto lending arm and its close partner Gemini Earn have frozen payouts. While neither has filed for bankruptcy to date, the situation with Genesis has sparked widespread speculation about the company’s financial health.
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Gold benefits from crypto woes
As the crypto market continues to bleed amid all the turmoil, this could actually be a win for the yellow metal. Robertsen has predicted the precious metal to rally to $2,250 an ounce if the crypto meltdown continues.
Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney, shared the same viewpoint, saying gold would benefit from crypto woes. “Gold will benefit from the crypto woes going forward as confidence in the crypto ecosystem suddenly declines,” he said.
Notably, gold sentiment is also bullish near-term. Gold is currently trading near its best levels in five months, above $1,800. Additionally, optimism surrounding China’s reopening and dovish Fed expectations could pave the way for a gold rally.
Meanwhile, Bitcoin is pretty stable right now. The flagship cryptocurrency has been hovering around $17,000 since FTX collapsed over the past two weeks. As of now, the coin is trading at $17,305.42, up 1.8% over the past day. The total crypto market cap is just over $900 billion.
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About the author
Ruholamin Haqshanas is an accomplished crypto and financial journalist with over two years of writing experience in the field. He has a solid understanding of various segments of the FinTech space, including the decentralized iteration of financial systems (DeFi) and the emerging non-fungible tokens (NFTs) market. He is an active user of digital assets for remittances.
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