BTC to drop to $10,000 before erupting 200%: VanEck

• Matthew Sigel predicted BTC might fall to the $10,000 and $12,000 range in Q1 2023.
• MVIS Global Digital Assets Mining Index’s average market cap is only $180 million. 

There is a lot of speculation surrounding the world’s most popular cryptocurrency, Bitcoin. Ark Invest’s Cathie Wood predicted that BTC will reach the $100,000 mark by 2030. That might or might not happen. Meanwhile, rumors are circulating that BTC might touch the $12,000 mark. Matthew Sigel, head of digital assets research at VanEck, predicted wild fluctuation saying that it may fall between $10,000 and $12,000 in the first quarter of next year. 

Sigel feels that the unprofitability of BTC mining, which is causing miners to either cut costs or file for bankruptcy, shall trigger the crash as most miners are leaving the sector due to a trifecta of problems – rising energy prices, increasing difficulty, and Bitcoin’s low price. 

“Bitcoin will test $10,000 – $12,000 in Q1 amid a wave of miner bankruptcies, which will mark the low point of crypto winter.”

The MVIS Global Digital Assets Mining Index’s average market cap is now only $180 million, and almost all the players are trading well below the book value. 

“With Bitcoin mining largely unprofitable given recent higher electricity prices and lower BTC prices, we predict that miners will restructure or merge.”

The MVIS Global Digital Assets Mining Index overlooks the performance of all the firms that generate at least half of their revenues either through activities related to the crypto mining ecosystem or by mining digital assets themselves. 

Sigel says that BTC could soar up to $30,000 from July 2023, as by that time, lower inflation could trigger the easing of monetary and fiscal policies. 

He hinted at the rising fear of an upcoming recession, saying that if the fear materializes, the Federal Reserve will pause rate hikes while inflation cools down. At the same time, money printing and government budget deficits will continue. 

Bitcoin still depends upon the energy-intensive Proof-of-Work consensus mechanism due to which, the average transaction completion time is 10 minutes. Miners, individual or institutional, require robust and heavy hardware to crack hash codes. The hardware the BTC miners use are fuel guzzlers. BTC miners are exiting the industry for these reasons. Also, that the mining reward is about to drop to 3.125 BTC next halving will only make mining more challenging.

A miner is an integral part of the functioning of the Bitcoin network, as he is the one who validates transactions.

Bitcoin was trading at $16,735.01 at press time.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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