What’s going on with the price of Bitcoin and Ethereum? Can they ever recover to the same highs as last year? Is my crypto portfolio doomed forever? Let us answer all of those questions and more in this 2023 crypto price prediction.
2022 crypto market wrap
Cryptocurrencies have suffered a catastrophic downturn over the course of the last year, with the price of Bitcoin (BTC) plummeting 76% from its all-time high, and Ethereum (ETH) following suit with a similar 75% nosedive.
In real numbers, the total sum of money flowing through the cryptocurrency ecosystem has fallen by more than US$2 trillion since November last year, according to data from TradingView.
The ongoing downward price action that has now battered almost every cryptocurrency has left many looking around for a glimmer of hope, with millions of crypto investors asking when they can expect the price of mainstay crypto assets like Bitcoin and Ethereum to rebound.
Trying to predict the price movements of crypto assets like BTC and ETH has proven notoriously difficult. Crypto assets are even more susceptible to market factors than more established or ‘traditional’ assets like stocks, commodities and bonds. Still, we want to know what the experts believe the beginning of 2023 has in store for crypto.
With investors continuing to turn away from risky assets in the time of a slowing economy, increasing inflation, and rising interest rates, it seems unlikely that crypto will bounce upwards again any time soon. Most major analysts at Wall Street echo this bearish sentiment and expect the market doldrums to last a few more months at the very least.
New crypto assets will drive the bull market in 2023
Richard Fetyko, the CEO of crypto analytics platform altFINS said that despite the recent market turmoil there’s still plenty left to be hopeful for in the coming year.
“I think we could see a decent 20-30% rally near-term for Bitcoin and Ethereum. This is because we’re currently at oversold levels,” he said.
Investors would be wise to look to the future as well, says Fetyko, suggesting that the flood of bear-market venture capital will see a host of new investment opportunities join the fold over the course of the next year or two.
“I also expect many new digital assets to hit the market in 2023/2024 time frame from a large cohort of blockchain projects that were funded by 2022 when a record breaking $25B was invested by VCs into digital asset startups,” he said.
Fetyko adds that it’s entirely possible this run could be the start of a new bull market.
“It’s possible that we’ve seen the bottom already after 70%+ drawdown from prior cycle’s highs. Crypto markets have been in a sideways channel since June really, despite absorbing all sorts of negative macro news — inflation, the UK mess, war and the China slowdown,” he explained.
“The initial stages of a bull cycle tend to be choppy, with lots of contradicting noise that will drive waves of greed and fear,” Fetyko concluded.
Bryan Ventura isn’t as hopeful
Taking a slightly more sceptical outlook on the future price of Bitcoin is Bryan Ventura, a senior lawyer specialising in Web3 and the chair of BlockchainNZ, who told The Chainsaw that he expects Bitcoin to continue on its decline before reaching a valuation of US$14,000 before this year is through.
Ventura anticipates that Bitcoin will bottom out at “somewhere around US$12,000 mark” in mid-2023, and if global macro conditions improve significantly then we’d look set to kick off a new bull cycle heading into 2024.
Gareth Soloway says we’re still six months away from the bottom
In a recent interview, prominent stock trader Gareth Soloway predicted that the bottom for Bitcoin is still roughly six months away, basing his thesis on what went down when the Lehman Brothers collapsed in 2008.
“When I look at FTX, I see Lehman Brothers. At the time, Lehman was one of the major banks. FTX was one of the major exchanges,” Soloway said.
Lehman was the catalyst that brought about a major slump in the stock market, and Soloway believes that the recent collapse of FTX will serve a similar purpose in the crypto industry.
“It took about six months from the Lehman Brothers event to get to the lowest point on the S&P 500. So in that thought process, if FTX is the Lehman event of the crypto markets, you’re looking at about five to six months.”
“Buying the dip doesn’t apply” says 8-trillion-dollar fund manager
Amidst the recent FTX turmoil, BlackRock, the world’s largest asset manager with roughly US$8 trillion under management, has warned crypto and stock investors alike that the Federal Reserve won’t be coming to anyone’s rescue in 2023.
“A recession is foretold; central banks race to try to tame inflation. This is the opposite of past recessions,” BlackRock wrote in a recent outlook report.
“We expect to turn more positive on risk assets at some point in 2023 – and when we get there, we don’t expect to see the sustained bull markets of the past,” the strategists added.
“What worked in the past won’t work now,” the strategists said. “The old playbook of simply ‘buying the dip’ doesn’t apply in this regime of sharper trade-offs and greater macro volatility. We don’t see a return to conditions that will sustain a joint bull market in stocks and bonds of the kind we experienced in the prior decade.”
Overall, the team at BlackRock aren’t ruling out a rally for crypto and stocks, they’re simply stating that investors looking to take on risk, will need to be a little more cautious come 2023, as the Federal Reserve is no longer capable of “saving the day” with stimulus packages.
Carlos Gomez maintains hope for crypto in 2023
Carlos Gomez, the Chief Investment Officer at Belobaba Crypto Asset Fund provided The Chainsaw with a slightly more positive outlook for the price of Bitcoin heading into next year.
“There are opposing forces clashing against each other when it comes to the direction of Bitcoin, Ethereum and the rest of the crypto market over the next three weeks. Overall, they are mostly skewed to the positive side,” Gomez explained.
“On one hand, we have Washington sending mixed signals towards the actions of SBF, FTX and the Alameda crew. They are heavily investigating their involvement in the collapse of the Terra/Luna protocol, but it appears they are not too interested in digging into the FTX matter, which is causing a lot of regulatory uncertainty,” he said.
Gomez also points to the growing adoption of Bitcoin in Brazil and South, saying that the increase in demand from these “very important markets” should help drive prices up.
“On-chain data is also giving us a very interesting signal. The MVRV Z-Score is entering the green zone that historically precedes huge spikes. Based on that, I believe we are not far from the bottom,” Gomez added.
2023 crypto price predictions: Bitcoin
Possibly one of the most bullish commentators on the future of crypto issued a stunning prediction that Bitcoin could “quite reasonably” reach a value of US$1 million by 2030, even as the FTX crisis hammers the crypto industry.
“We think Bitcoin is coming out of this smelling like a rose,” Ark Investment Management chief executive Cathie Wood told Bloomberg, in the wake of the sudden collapse of the world’s fourth largest crypto exchange FTX midway through last month.
Bitcoin advocates like Wood, maintain the position that Bitcoin is uniquely sheltered from the current crypto crisis, arguing that its properly decentralised structure and fixed supply of 21 million Bitcoin sets it apart from other cryptocurrencies and draws a line in the sand between it and the myriad problems facing centralised crypto companies elsewhere.
“You need to go through crises to see the survivors and battle test the infrastructure and the thesis,” Wood said.
Sitting in the same camp as Wood isSerhii Zhdanov, The CEO of EXMO, who told Finder that he remains optimistic that Bitcoin will reach $1,000,000 in 2030.
“Nothing fundamentally has changed for Bitcoin, it’s a global capital crisis and Bitcoin is affected in a short term but will recover; a lot of other financial assets will not.”Serhii Zhdanov
Crypto adoption is still on the rise
Putting aside all of the financial and market speak for a second, one reason to be hopeful about the future value of cryptocurrency can be found in the uptake of crypto around the world.
New figures from blockchain analytics firm Chainalysis show that while the adoption of crypto internationally has slowed down a bit from last year, emerging economies in South East Asia, Eastern Europe and Latin America have been quietly driving forward in their pursuit of crypto ownership.
Kim Grauer, Director of Research at Chainalysis told The Chainsaw that even though this year’s overall figures don’t signal any major increase from last year, there has been an enormous uptick in emerging markets adopting cryptocurrencies.
“Our research suggests that reasons for this increased adoption differ around the world — in emerging markets, many turn to cryptocurrency to preserve their savings in the face of currency devaluation, send and receive remittances, and carry out business transactions,” she said.
According to Grauer, countries with emerging economies dominate the adoption cycle, in large part because cryptocurrencies provide unique, tangible benefits to people living in unstable economic conditions.
This is different to more developed markets, which have seen their adoption rates climb most significantly due to the trading associated with banks, hedge funds and crypto prop shops.
That’s all for this edition of The Chainsaw’s 2023 crypto price prediction.