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It's been a challenging year for crypto investors.
There was the recent implosion of FTX, an exchange previously thought of as relatively trustworthy and run by one of the most prominent figures in the crypto industry. Earlier in 2022, there was the bankruptcy of crypto lender Voyager and the collapse of TerraUSD, a "stablecoin." (A stablecoin is a cryptocurrency with a price pegged to another asset like the U.S. dollar).
Bitcoin was trading at $16,607 on Thursday — down 65% from the beginning of the year. It’s no wonder that roughly half of bitcoin investors would lose money if they sold now, according to data from analytics firm IntoTheBlock.
So what’s in store for the price of the largest cryptocurrency in 2023? Here’s what experts are saying.
Will bitcoin's price keep dropping in 2023?
Amid the chaos in the early days of the collapse of the exchange FTX, Mobius Capital Partners co-founder Mark Mobius told Bloomberg that he expected bitcoin to fall to $10,000 per coin. He noted that while “crypto is here to stay,” he would not invest any of his client’s money or his own money in bitcoin because it is “too dangerous.”
Mobius later elaborated on his forecast in an interview with CNBC, attributing the anticipated losses to rising interest rates and increasing investor worries surrounding the crypto market. He said that while he expects bitcoin's price to hover around $17,000, it could fall to $10,000 next year.
Matthew Sigel, head of digital assets research at investment firm VanEck, is looking ahead to a similar price target. He predicts that the cryptocurrency will fall to between $10,000 and $12,000 per coin in the first quarter of next year.
Sigel cites struggling crypto miners as the reason for the decline: “With Bitcoin mining largely unprofitable given recent higher electricity prices and lower Bitcoin prices, we predict that many miners will restructure or merge,” he wrote this month.
But crypto prices are still unpredictable
It's worth remembering that cryptocurrency is one of the most volatile assets out there. Prices swing wildly, and not every expert takes the same view.
Morningstar senior research analyst Madeline Hume says the unpredictable nature of digital assets makes it difficult to know when prices will stop falling.
“Bitcoin, and crypto in general, faces the double whammy of a crypto winter already in full swing and a challenging macroeconomic climate on the horizon," Hume says. "Although crypto has already fallen a lot since its peak in November 2021, the absence of fundamental valuations for these assets means that we won’t know where the bottom is until we’re past it, and there’s no indication of a thaw yet.”
Sigel’s forecast improves in the second half of the year. As inflation eases, energy prices stabilize and the crisis in Ukraine (potentially) winds down, Sigel predicts bitcoin prices could climb back up to $30,000 in the third and fourth quarters of 2023.
Some analysts have predicted that bitcoin could drop as low as $5,000 over the next year, while others have said prices will climb to $250,000. Experts from Ark Investment Management, which is headed up by famed investor Cathie Wood, is standing by its prediction that one bitcoin will be worth more than $1 million by 2030.
“So is crypto done?" Sigel writes. "Not by a longshot.”