Key takeaways
- Bitcoin price predictions range from $250,000 all the way down to $5,000.
- Inflation is a key factor in Bitcoin's price in 2023.
- Some believe that this year could precede a big rise in Bitcoin prices next year with Bitcoin halving.
We all know crypto was the big loser of 2022. Terra Luna ended up being worthless, Celsius went bankrupt and FTX’s founder was arrested on alleged fraud charges. This time last year, Bitcoin was flying high at almost $46,000. Now, it’s only around a third of that valuation.
That hasn’t dampened the spirits of die-hard Bitcoin investors. Many are hoping a comeback is on the cards in 2023 to claw back losses. Others are predicting more crashes even worse than what 2022 saw. Some are even saying Bitcoin will disappear forever.
It’s safe to say cryptocurrencies and Bitcoin don’t follow the market playbook, so predictions range from soaring highs to plummeting lows. Let’s look at the high-profile calls for Bitcoin prices in 2023.
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The good
Kicking things off with the most optimistic Bitcoin call, investor and long-time crypto supporter Tim Draper has revised his $250,000 prediction for the price of Bitcoin to hit in the middle of 2023. Ever the crypto optimist, Draper believes the market has yet to hit the retail market where women control 80% of spending.
Alistair Milne, founder of Altana Digital Currency Fund, is predicting Bitcoin’s price will surge to $45,000 depending on what happens with inflation. Writing on Twitter, he said he is “basically [all-in]
again” and argued Bitcoin will prove its resilience once more.
Both men cite the upcoming halving in 2024 as a key factor in 2023’s performance. This is where the reward for Bitcoin farming will halve, a process that’s coded to happen every four years. Bitcoin halving counteracts inflation and keeps the amount of Bitcoin in circulation at a steady rate.
Milne suggests prices could hit massive highs of $300,000 by the end of next year and said “this was no time to be bearish”. Draper suggested on Twitter his prediction will “certainly [happen] before the halvening”. Bitcoin fans will certainly be keeping an eye on these two predictions for the next couple of years.
Professor of Finance at Sussex University, Carol Alexander has called a $30,000 Bitcoin price increase in the first half of 2023, eventually hitting $50,000 by the end of the year. Given her prediction last year that Bitcoin would bottom out at $10,000 wasn’t too far off the mark, many traders are taking Alexander’s word as gospel.
Her reasoning? Crypto whales, an elusive group of wallets that account for roughly 15% of the entire Bitcoin supply according to BitInfoCharts. These whales have the potential to step in and save the day, should the market need it.
CIO of crypto hedge fund Arcane Assets, Eric Wall has said Bitcoin’s $15,400 price “was the bottom” and predicts the price will “pump above $30k”. These less outlandish figures calling steady growth will be a relief to those who watched their crypto portfolio tank in 2022.
The bad
Not everyone is bullish on Bitcoin. Mark Mobius, the billionaire founder of Mobius Capital Partners, called in early December that Bitcoin will fall further to bottom out at $10,000 in 2023. His reasoning is that the US Federal Reserve’s tightening monetary policy and rising interest rates will further scupper the Bitcoin market.
Mobius’ predicted in 2022 that Bitcoin would drop further to $20,000 when the price hit $28,000 back in May. As a result, many are taking the veteran investor’s latest warning as a sure sign the crypto winter isn’t over yet.
Mobius’ prediction has been echoed by VanEck Investments, whose head of digital assets research Matthew Sigel says Q1 will see Bitcoin hit $10-$12,000. He cites higher energy prices and Ripple’s SEC lawsuit as key factors in the continued drop.
While not an outright crypto prediction, legendary investor Dr Michael Burry has called we haven’t seen the last of inflation peak. “We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut and government will stimulate. And we will have another inflation spike,” Burry wrote on Twitter.
What does this mean for crypto? More investors and institutions could sell up, putting pressure on the market once more. Inflation has wreaked havoc on the crypto market in 2022 and may do the same this year. Only time will tell if this prediction comes true.
The ugly
Consumer bank Standard Chartered has predicted Bitcoin prices will fall to as low as $5,000. The bank’s global head of research, Eric Robertsen, made the call in December. He wrote: “More and more crypto firms and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets.”
Ominously, Robertsen predicted with mass tech sell-offs and plunging share prices, the “damage has been done” for Bitcoin. Hitting the $5,000 mark would be around a 70% drop from its current $17,000 market price. Not great for those with skin in the game, but a potential opportunity for those looking to get into Bitcoin while the prices are low.
If you’re panicking, there’s no need to run for the hills yet. It’s worth noting Standard Chartered included this as part of their ‘surprise’ predictions for markets in 2023. The call “[falls] materially outside of the market consensus or our own baseline views.”
The European Central Bank was even harsher with its estimations. It called in November that Bitcoin’s latest fluctuation and the volatility of 2022 was the final nail in the coffin for the cryptocurrency, despite the rally in Q4. Ulrich Bindseil and Jürgen Schaaf argued “it is an artificially induced last gasp before the road to irrelevance – and this was already foreseeable before FTX went bust and sent the bitcoin price to well below $16,000.”
To some, this assessment is too black and white. The authors of the piece cite Bitcoin’s slow adoption amongst everyday users and unsuitability as a stable investment. However, many would say digital assets are still in their infancy and the best is yet to come.
Whatever happens, 2023 is certainly going to be a rollercoaster ride for those in the crypto world.
How should investors approach Bitcoin investing in 2023?
So with such wide predictions, what are crypto investors to do? Well, diversification is one option, but that doesn’t have quite the same benefits as it does in traditional investment markets.
Generally, when Bitcoin goes up, everything goes up. When Bitcoin goes down, everything goes down. Diversification just changes the amount your portfolio can fluctuate, but when Bitcoin is the least volatile asset you hold, you know it’s going to be a bumpy ride no matter what.
You could also enlist the help of AI. We’ve created the AI-powered Crypto Kit, which automatically adjusts the holdings within the Kit each week, based on the predictions from our AI.
It means you can hold a diversified mix of crypto assets via public trusts, that might include Bitcoin and Ethereum, as well as smaller cap coins and tokens like Cardano, Solana, Uniswaps and Litecoin.
Investing in this Kit definitely doesn’t mean you’ll be immune to volatility, but you’ll have AI in your corner to help.
