Bitcoin could plunge by a further 70 per cent next year as investors scramble for safe havens like gold amid continued turmoil on the markets, analysts have warned.
In a note to investors, analysts at Asian-focused bank Standard Chartered said the most valuable crypto currency could plunge to $5,000 (£4,100) next year, after already shedding more than 70 per cent of its value from a November 2021 peak to trade at around $17,000.
The sharp fall in prices comes amid a so-called ‘crypto winter’ in which soaring inflation and rising interest rates have sparked rapid sell-offs in crypto prices and led to a string of high-profile bankruptcies, including Sam Bankman-Fried’s exchange FTX.
Analysts at Standard Chartered said the downturn would continue and gold, regarded as a safe-haven asset in times of turmoil, would see a boost in prices.
“Gold makes a staggering recovery in 2023, rallying 30 per cent to over USD 2,250/oz as cryptocurrencies fall further and more crypto firms succumb to liquidity squeezes and investor withdrawals,” the analysts predicted.
“The 2023 resurgence in gold comes as equities resume their bear market and the correlation between equity and bond prices shifts back to negative.”
They added that gold exchange traded fund holdings – which are down nearly 15 per cent from a high-point on 22nd of April 2022 – would surge to new highs above 110mn troy ounces.