As reported by Bloomberg, the head strategist of Standard Chartered believes there is a high risk of Bitcoin plunging to the $5,000 level — where it was last briefly seen in March 2020. He believes this may happen as the aftermath of the FTX crash may continue.
Bitcoin to $5,000 again? Here's why it is possible, per Robertsen
Eric Robertsen, global head of research at Standard Chartered banking giant, wrote in a note this weekend that the leading cryptocurrency Bitcoin may continue to decline, pushed down by the FTX crash that occurred in early November as it was declared insolvent, along with its founder Sam Bankman-Fried.
Therefore, the predicted decline of Bitcoin is down 70% from the level it is trading at currently.
Robertsen believes that interest in Bitcoin may face a significant fall and switch from digital gold to gold again. He expects the gold price to put up a 30% rally.
The other two factors that may lead to a Bitcoin crash are a reversal of interest-rate hikes and the emergence of more bankruptcies in the crypto space, which would lead investors to lose their confidence in crypto assets.
Some other companies are already facing liquidity issues after FTX. One of them is Genesis lending crypto firm, subsidiary of Digital Currency Group. At the moment, the DCG and its founder billionaire Barry Silbert are seeking ways to raise funds to save Genesis from insolvency.
Tim Draper stands by his $250,000 prediction
Prominent venture investor Tim Draper, who has been constantly naming 2022 as the year when Bitcoin would reach $250,000, has recently told CNBC that he continues to believe in this prediction.
However, he has extended the timeline for it, adding another half a year. Now, he expects BTC to soar to the $250,000 level by mid-2023, which seems rather unlikely at the moment.