Standard Chartered warns of potential 70% drop for Bitcoin in 2023

Writing on potential surprises for 2023 that investors have not yet factored in, Standard Chartered predicts Bitcoin has the potential to drop a further 70 percent.

The forecast was made in a note written by Standard Chartered global head of research Eric Robertsen on Sunday and reported by the media.?

He said he sees the potential for Bitcoin to fall to $5,000 compared with its current price of about $17,000 on Monday.?

“Yields plunge along with technology shares, and while the Bitcoin sell-off decelerates, the damage has been done,” CNBC cited the note as saying. “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.”

However, while saying this is a potential negative surprise, Robertsen also conceded that the view is out of line with consensus and outside of the bank’s own baseline views.?

He said that a drop in Bitcoin is likely to coincide with a return to gold as a safe haven, with investors seeking stability in a period of market volatility.?

“The 2023 resurgence in gold [also] comes as equities resume their bear market and the correlation between equity and bond prices shifts back to negative,” he said.?

Cryptocurrency prices have plunged this year, with sentiment made worse recently by the high-profile collapse of crypto exchange FTX.?

The exchange, led by Sam Bankman-Fried, filed for bankruptcy protection in the U.S. last month, with billions of dollars in funds now missing.?

The case has had a negative ripple effect throughout the markets, with several other exchanges also teetering on the brink.?

Last week, BlockFi and Bitfront also joined the ranks of those seeking protection from creditors.?

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