Standard Chartered predicts a further 70% plunge for Bitcoin (BTC) to $5K in 2023 and a comeback from Gold.
London-headquartered multinational bank Standard Chartered has made some projections for 2023 regarding risk assets, including a further 70% downward price movement for the firstborn crypto Bitcoin and an imminent comeback from gold. According to Standard Chartered representatives, the prevalent Crypto Winter could further batter bitcoin to $5K in 2023.
Due to the unpropitious conditions surrounding the broader crypto markets due to the recent FTX collapse and the persistent macro atmosphere, Global Head of Research at Standard Chartered, Eric Robertson, is predicting a switch of attention and subsequent investor demand from BTC to gold, as recently reported by Bloomberg.
It bears mentioning that, despite the damaging effects of unfavorable macroeconomic conditions on gold, the age-old asset has shown more resilience than the firstborn crypto; this has led to a dip in the ratio of BTC to gold, plunging to its lowest point since 2020. Robertson’s assertions are partly hinged on this growing pattern.
Bitcoin has already sunk by over 65% against gold in the past year, dipping from 27.6 Gold Ounce (XAU) for one bitcoin in December of 2021 to the current value of 9.6 XAU as of press time. Furthermore, with a current value of $17,250, BTC is nearly 75% down from its ATH of $68K.
The Terra Collapse of May and the Three Arrows Capital fiasco dealt a huge blow to the asset’s price movements as investor confidence waned drastically. Bitcoin had since then been hanging on the support at $20k as it looked to make a comeback. Notwithstanding, the bears found strength in the most recent FTX collapse, battering the asset to lows below $16K. Several market watchers, however, have reason to believe that the bottom is already priced in, but uncertainties abound nonetheless.
“Our base case is that most forced selling is over, but investors might not be compensated for the market risk incurred in the immediate term,” Fundstart’s Head of Digital Asset Strategy Sean Farrell remarked last Friday as he spoke on the Winter. Farrell also highlighted the growing concerns surrounding Genesis and the Digital Currency Group.
Gold Could Leverage The Troubles in the Crypto Scene
On the other hand, Robertson asserted that a switch in investor interest from BTC could be leveraged by gold to stage a rally to $2,250 an ounce, marking a 25% increase from the current value of $1,795 as of press time.
“Gold will benefit going forward from the problems in crypto, with the sudden decline in confidence in the crypto ecosystem,” Sydney-based ABC Refinery’s Global Head of Institutional Markets Nicholas Frappell remarked. These assertions are prompted by concerns of further selloffs due to the FUD precipitating into the crypto scene of late.
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