After reaching heady heights in 2021, the cryptocurrency market has had to weather a period of tightening monetary policy, which has resulted in sell-offs, the implosion of projects like Terra, the bankruptcy filings of CeFi companies like Celsius Network and Voyager Digital, and the ultimate collapse of the FTX exchange in 2022.
Many people in the crypto community are divided on whether 2023 will be a good year for cryptocurrencies. Due to the difficulties of the larger economy, many analysts believe this recession is unique. On the other hand, when asked whether 2023 will be a bullish or negative year, nearly 84% of respondents in a survey by Coinmarketcap said the former.
After dropping to a low around the $10,000 to $12,000 level, the price of Bitcoin (BTC), the flagship cryptocurrency, may rise to $30,000 in the second half of 2023, according to a prediction by a fund manager at investing giant VanEck.
However, analysts at JP Morgan believe that since the crypto’s image was badly damaged by the crisis and scandals that took place in 2022 and the broader market continues to suffer, another drop to $10,000 for BTC in 2023 could be like this. Couldn’t be a weirder prediction.
On the other hand, during an interview with Bloomberg, the chief investment officer at Guggenheim Partners, Scott Minerd, issued a warning to investors that more market disruptions are on the horizon in the wake of the recent failure of the cryptocurrency exchange FTX.
When asked if he thinks there is going to be another shoe to fall in the financial stability aspect of the cryptocurrency sector, Minnard simply replied that yes, there is.
“The reason is this is just like any number of periods where we had easy money and a lot of speculation; the weakest players fall first. Crypto was obviously something that is crazy.”
He added that: “A year ago we were talking about cryptocurrencies, and there were about 19,000 coins. There’s going to be a washout just like the internet bubble.”
However, he reassured listeners that there will be survivors, noting that the transition to digital currency is still in its infancy and that its further development needs a legal and regulatory infrastructure.
Furthermore, the Guggenheim executive drew comparisons between the bitcoin sector and the dot-com bubble in his assessment. He also said that he was unable to understand the excitement surrounding the non-fungible token (NFT) industry, which had waned at this point.
Bottomline
Notably, the investor forecasted earlier this year that the price of Bitcoin might hit rock bottom at the amount of $8,000 before continuing its upward trend.
Minerd also predicted that the Federal Reserve’s restrictive monetary policy would lead to an increase in unemployment of approximately 2% during the next two years.
It remains to be seen whether his forecast for BTC will come to pass. The cryptocurrency has been trading in the negative for the previous 24 hours, now hovering around $17,000.
However, Minerd’s predictions are nothing more than his own opinion. He certainly does not have the ability to predict the future. Investors should not blindly rely on analysts’ forecasts. Anything can happen.
