The price of Bitcoin is believed to drop to $5,000 in the next year amid uncertain market conditions, according to Standard Chartered.
If that level is reached, it will mark a drop of about 70% from today's price which is trading at $17,000 for one bitcoin.
In a note titled “Financial market shocks 2023,” Standard Chartered outlined several possible scenarios that could push the price of BTC to fall further.
“Yields plummeted along with tech stocks, and while Bitcoin sales slowed, the damage was done. "More and more crypto firms and exchanges are finding themselves with insufficient liquidity, leading to further bankruptcies and a drop in investor confidence in digital assets," Eric Robertsen, head of global research at Standard Chartered Bank, said in a Sunday note.
Robertsen even said that a more extreme scenario could occur and that it has even a small probability of happening in the next year, and falling materially outside the market consensus.
Bitcoin has fallen more than 60% this year after a string of collapses of industry players took place in the market. The latest and biggest happening in the market is what happened to the cryptocurrency exchange FTX which has filed for bankruptcy. Contagion from the FTX fall continues to spread through the market.
A fall in the price of bitcoin will also coincide with a rise in gold, Robertsen said, arguing that the yellow metal could potentially jump 30% to $2,250 an ounce.
Robertsen said gold could strengthen further and position itself as a relevant safe haven with investors flocking to the commodity for stability during market volatility.
"The 2023 gold resurgence also occurred as equities continued to decline and the correlation between equity and bond prices shifted back to negative," he added.
Standard Chartered's view is not the only view that the price of BTC will fall. Veteran investor Mark Mobius previously also expressed the view that he sees the price of bitcoin could fall to $10,000 in 2023 due to rising interest rates and tighter monetary policy from the U.S. Federal Reserve.
However, there are still those who believe in bitcoin. Venture Capitalist Tim Draper recently announced that he expects the price of bitcoin to reach $250,000 next year.
