The world’s first and largest cryptocurrency could fall as low as $5,000 in a scenario dreamed up by the banking group, the outbreak of “crypto bubble“, which has consequences throughout 2023.
“Dividends are plunging along with tech stocks, and if Bitcoin sales slow, the damage is done“, writes the bank’s head of global analysis, Eric Robertsen.
This prediction was made as part of Standard Chartered’s annual list of surprises which analysts believe the markets may be overlooking or underestimating.
Other possible surprises for the coming year include a drop in oil prices, the impeachment of US President Joe Biden and a collapse in food prices.
The list, now in its eighth edition, is not intended to predict high-probability events, but to consider situations with a non-zero chance of occurring that are not currently part of the market consensus. .
According to the report, if more crypto companies and exchanges run out of cash, investor confidence in crypto assets could plummet, sending people back to the classic safe haven of gold.
Under this scenario, gold could rise 30%. The precious metal has received little love in 2022, falling 20% from its March highs, but it could benefit from lower crypto confidence.
Bitcoin follows the general decline of technologies
Standard Chartered also identified the possibility of a wider decline in tech stocks, even faster than beating taken by many companies this year.
Nasdaq 100 company values are down about 25% in 2022, but analysts have compared that decline to an even bigger drop seen during the dot-com crash of the early 1980s, suggesting there’s still room.
Such a decline could be linked to the crypto sector’s problems, the researchers wrote.
“Perhaps echoing the contraction of the digital asset sector, next-gen tech companies see a rise in bankruptcies in 2023“, they said.
Meanwhile, early-stage companies may find it more difficult to secure funds in this situation as funding costs increase and liquidity shrinks.