We all know that the crypto world suffered a tremendous loss in 2022, but is crypto still a good investment in 2023? With more than $1.3 trillion in market value wiped out in only one year, this is a difficult topic to address right now. Terra Luna became worthless, Celsius went bankrupt, and FTX’s creator was jailed on suspicion of fraud. Last year at this time, Bitcoin was about $46,000. It’s now worth around a third of what it was.
That hasn’t dimmed the spirits of Bitcoin’s ardent supporters. Many people are expecting a rebound in 2023 to recoup losses. Others foresee even more crashes like the one in 2022. Some even believe Bitcoin will vanish forever.
Because cryptocurrencies like Bitcoin do not follow the market script, forecasts range from skyrocketing highs to collapsing lows. Consider the prominent projections for Bitcoin’s pricing in 2023.
Bitcoin might reach $250k, the ever-optimistic say
To begin, investor and long-time crypto proponent Tim Draper has changed his $250,000 estimate for the price of Bitcoin to reach in the middle of 2023.
To trade at that level, Bitcoin would have to increase by 1,400%.
Despite low prices and dwindling trade volumes, Draper believes there are grounds to believe the market has reached a bottom.
According to Alistair Milne, founder of Altana Digital Currency Fund, Bitcoin’s price will rise to $45,000 depending on what happens with inflation. He said on Twitter that he is “essentially [all-in] again” and believes Bitcoin will prove its resilience once more.
Both guys point to the forthcoming halving in 2024 as a crucial component in the success of 2023.
Halving, also known as halvening, is a four-year event in which Bitcoin payouts to miners are slashed in half. Some investors see this as good for Bitcoin’s price since it reduces supply. The next halving is scheduled for sometime in 2024.
Bitcoin miners, who use high-powered equipment to verify transactions and create new currencies, are being pressured by price declines and growing energy costs.
These actors amass large amounts of digital cash, making them some of the market’s biggest sellers. With miners selling their shares to pay off obligations, much of the remaining selling pressure on bitcoin should be removed.
Is halving going to help Bitcoin’s price again?
That has historically been a bullish indication for Bitcoin, since miner capitulation has frequently preceded large bottoms in previous down markets. Their cost of production exceeds the value of Bitcoin, therefore a lot of miners either turn off their rigs… or sell more bitcoin to keep their firm viable. If the market absorbs enough of the miner selling pressure, we may presume that we are in a bottoming phase.
Milne predicts prices might touch huge highs of $300,000 by the end of next year and states, “This is no time to be negative.” Draper predicted that his forecast will “definitely [happen] before the halvening” on Twitter. Bitcoin enthusiasts will undoubtedly be watching these two predictions closely over the coming several years.
How can crypto whales save the day?
Carol Alexander, a finance professor at Sussex University, was correct when she predicted that Bitcoin would fall below $10,000 in 2022.
Now, she believes the cryptocurrency is poised for growth—but not for the reasons you may assume.
According to Alexander, the catalyst would be additional dominoes from the FTX debacle tumbling over. If this occurs, she predicts Bitcoin will reach $30,000 in the first quarter and $50,000 by the third or fourth quarter.
According to Alexander, crypto whales, an enigmatic collection of wallets accounting for around 15% of the total Bitcoin supply, might save the day. These whales have the ability to intervene if the market requires it.
What do the not-so-bullish ones say?
Not everyone believes in Bitcoin. Mark Mobius, the billionaire founder of Mobius Capital Partners, predicted in early December that Bitcoin would fall much lower, reaching $10,000 by 2023. His premise is that the US Federal Reserve’s tightening monetary policies and rising interest rates would stymie the Bitcoin market even further.
When Bitcoin touched $28,000 in May, Mobius projected that it would fall to $20,000 by 2022. As a result, many are viewing the senior investor’s recent warning as proof that the crypto winter is far from over.
While not an actual crypto forecast, famed investor Michael Burry has stated that the pinnacle of inflation has not yet passed. “We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut and government will stimulate. And we will have another inflation spike,” Burry stated on Twitter.
What does this mean for cryptocurrency? More investors and institutions may sell, putting more pressure on the market. Inflation wrecked havoc on the cryptocurrency market in 2022 and may do so again this year. Only time will tell whether or not this prophecy comes true.
Finally, there are the dark pessimists
Standard Chartered predicts that Bitcoin prices will fall as low as $5,000. Eric Robertsen, the bank’s global head of research, made the decision in December.
With enormous tech sell-offs and plummeting share prices, Robertsen projected that “harm has been done” to Bitcoin. The $5,000 figure would represent a 70% reduction from the current market price of $17,000.
The European Central Bank’s forecasts were even tougher. Despite the Q4 gain, it predicted in November that Bitcoin’s recent fluctuation and volatility would be the ultimate nail in the cryptocurrency’s coffin.
The ECB’s Ulrich Bindseil and Jürgen Schaaf said that “it is an artificially generated final gasp before the road to irrelevance, and this was already predicted before FTX went insolvent and drove the Bitcoin price well below $16,000.”
Well? Is crypto a good investment in 2023?
So, with such a broad range of expectations, what should crypto investors do? Diversification is one approach, but it does not offer the same advantages as it does in traditional investing markets. Through public trusts, you may own a diverse mix of crypto assets like Bitcoin and Ethereum, as well as lesser-cap currencies and tokens such as Cardano, Solana, Uniswaps, and Litecoin.
When Bitcoin rises, everything else rises with it. When Bitcoin falls, everything falls. Diversification just reduces the amount your portfolio may vary, but when Bitcoin is your least volatile asset, you know it’s going to be a rocky ride nonetheless.
Many people believe that digital assets are still in their infancy and that the best is yet to come. Whatever occurs, 2023 will undoubtedly be a rollercoaster ride for anyone involved in the crypto realm.
