After a tumultuous 2022, crypto investors are trying to figure out when the next Bitcoin bull could be.
Last week, at a crypto conference in St. In Moritz, Switzerland, CNBC spoke with industry insiders who painted 2023 as a year of caution. Bitcoin it is expected to trade in a certain range, be sensitive to the macroeconomic situation such as rising interest rates and continue to be volatile. A new bull run in 2023 is unlikely.
However, experts are optimistic about next year and beyond.
In 2022, the entire cryptocurrency market lost about $1.4 trillion in value, and the industry faced liquidity problems and bankruptcies, compounded by the collapse of the FTKS exchange. The contagion spread throughout the industry.
Although bitcoin rallied slightly at the start of the year, in line with risk assets like stocks, experts say it is unlikely to retest its all-time high of just below $69,000, but it may have bottomed.
“I think there’s a little bit more downside, but I don’t think it will be much,” Bill Tai, a venture capitalist and crypto veteran, told CNBC last week.
“There is a chance that.” [bitcoin] it’s kind of bottomed out,” adding that it could drop to $12,000 before rebounding.
Meltem Demirors, director of strategy at CoinShares, said bitcoin is likely to trade in a range between $15,000 and $20,000 on the low, and between $25,000 and $30,000 on the high.
She said much of the “forced selling” that occurred in 2022 as a result of the market collapse is now over, but not much new money is coming into bitcoin.
“I don’t think there’s a lot of forced selling left, which is optimistic,” Demirors told CNBC on Friday. “But again, I think growth is pretty limited because we’re also not seeing a lot of new inflows.”
Investors are also keeping an eye on the macroeconomic situation. Bitcoin has proven to be closely related to risky assets such as stocks, and especially tech-heavy ones Nasdaq. These assets are affected by interest rate changes from the Federal Reserve and other macroeconomic moves. Last year, the Fed embarked on an aggressive path of raising interest rates to try to tame inflation, which hurt risk assets along with Bitcoin.
Industry insiders said the changing macro situation could help bitcoin.
“There might be catalysts that we’re not aware of, again, the macro situation and the political environment is quite uncertain, inflation continues to be quite hot, I think that’s a new thing.” We haven’t seen that, you know, in 30, 40 years,” Demirors said.
“So who knows, as people look to make allocations for the new year where cryptocurrencies will fit into that portfolio?”
Timing Bitcoin’s Next Run
In interviews with CNBC, several industry participants discussed bitcoin’s historical cycles, which occur roughly every four years. Typically, Bitcoin will hit an all-time high and then have a huge correction. It will be a bad year and then a year of slight recovery.
Then the “halving” will happen. Then miners, who run specialized machines to efficiently validate transactions on bitcoin networks, see their mining rewards cut in half. Miners receive Bitcoin as a reward for validating transactions. The halving, which happens every four years, effectively slows down the market supply of bitcoins. There will only ever be 21 million Bitcoins in circulation.
A halving usually precedes a running with the bull. The next halving event takes place in 2024.
Scaramucci called 2023 a “recovery year” for bitcoin and predicted that in two to three years it could be trading at $50,000 to $100,000.
“You take a risk, but you also believe in it.” [bitcoin] adoption. “So if we get it right, and I believe we will, this could easily be a fifty to a hundred thousand dollar asset in the next two to three years,” Scaramucci said.
Tai, meanwhile, said the stock market’s launch is “probably a year away,” saying the effects of the FTKS collapse could be felt for another six to nine months.
Jean-Baptiste Graftieauk, global CEO of cryptocurrency exchange Bitstamp, told CNBC last week that the next exchange could come within the next two years, citing growing interest from institutional investors.
However, Demirors warned that the events of 2022 “caused enormous damage to the reputation of the industry and the asset class”, adding that “it will take some time to restore that confidence”.