What are the expectations of cryptocurrency experts for the future of Bitcoin in 2023?
Cryptocurrency investors are trying to figure out when the next rally for bitcoin could be after 2022 saw a sharp drop in the currency's value.
At a cryptocurrency conference last week in Switzerland, CNBC spoke to industry insiders who described 2023 as the “year of caution.”
Bitcoin is expected to trade within a specific price range, be sensitive to the macroeconomic situation such as rising interest rates and remain volatile, while a new rally is unlikely in 2023, however, experts are looking ahead to the next year and beyond with optimism.
Cryptocurrency performance last year.
In 2022, the entire cryptocurrency market lost about $1.4 trillion in value with the industry facing liquidity issues and bankruptcies topped by the collapse of the FTX exchange, which was followed by other exchanges.
While bitcoin faltered a bit at the start of the year, in line with risky assets like stocks, experts say bitcoin is unlikely to retest its all-time high below $69,000, but it may have bottomed out. .
“There is a possibility that bitcoin bottomed out here,” Bill Taye, a venture capitalist and cryptocurrency veteran told CNBC last week, adding that it could drop to $12K before jumping back.
Meltem Demirors, chief strategy officer at CoinShares, said that bitcoin is likely to be range-limited at a minimum of $15,000 to $20,000, and a maximum of $25,000 to $30,000.
She noted that much of the forced selling that occurred in 2022 as a result of market crashes is now over, but there is not a lot of new money coming into bitcoin.
"I think the upside is very limited, because we also don't see a lot of new inflows coming in," she added.
macroeconomic impact.
Investors also watch the state of the macro economy, as Bitcoin has proven to be closely correlated with risk assets such as stocks and, in particular, the Nasdaq.
These assets are affected by changes in interest rates from the Federal Reserve and other macroeconomic movements.
In the past year, the Fed has pursued aggressive rate hikes to try and tame inflation, which has hurt risk assets along with bitcoin.
Industry insiders see a change of scenery that could help Bitcoin, Demirors explained that there may be catalysts that they are not aware of, the macro situation and the political environment is somewhat uncertain, and inflation continues to rise.
The timing of the next bitcoin rally.
Many industry experts have talked about Bitcoin's historical cycles, which occur roughly every 4 years.
Typically, Bitcoin will reach an all-time high, then correct significantly, there will be a bad year and then a year of mild recovery, and then something will happen in the middle.
Anthony Scaramucci has called 2023 the “year of recovery” for bitcoin and predicts it will trade between the $50k-$100k range within two to three years.
Meanwhile, Tai said the start of the uptrend is “maybe a year away,” saying that the after-effects of the FTX crash could continue to be felt for another 6-9 months.