Marketing strategist at global wealth management company Stifel Barry Bannisterpredicted that Bitcoin could drop as low as $10,000 by 2023, driven by three key macro headwinds.
According to Business Insider, Bannister bitcoin stated that the price will be adversely affected by the planned US Federal Reserve tightening and the decrease in the balance sheet.
The strategist identified the global money supply as the first key macro factor to look at. He stated that since the S&P 500 and Bitcoin move with the conversion of global money to dollars, any supply factor will affect the price of BTC. According to Bannister, if the dollar strengthens, global M2 money growth slows, which could possibly result in a tightening of the US financial situation. Bannister believes that speculative assets like Bitcoin will collapse in such an environment.
Besides these, Fed He also discussed the impact of the 10-year US Treasury yield that tightening According to Bannister, the tightening will likely result in an increase in yield, which will stop Bitcoin from growing.
“If the rising 10-year TIPS yield lowers gold, that also puts pressure on Bitcoin. If Bitcoin, split by gold, drops to the lower end of its range (Fed tightens), Bitcoin could fall to $10,000 by 2023.”
Finally, the analyst said that due to the tightening of the Fed. S&P 500He underlined the impact of the stock risk premium. He added that Bitcoin likes a lower equity risk premium, so it is necessary to watch whether the Fed exit increases the equity risk premium or lowers the equity risk premium.
At press time, Bitcoin’s value has dropped nearly 8% over the past seven days, trading at $40,100. If Bannister’s prediction comes true, the asset will drop 75% from its current value.
What Do Other Analysts Think?
Interestingly, several market analysts are predicting that Bitcoin will likely drop further, but return to its all-time high.
chief market strategist at InTheMoneyStocks.com Gareth Solowaypredicted the price of the asset at $17,000 in the near term. But Soloway argued that this would be short-lived.
However, a drop to $10,000 won’t be the first in the asset’s history. For example, in 2018, the leading cryptocurrency and the overall market entered a “crypto winter” after a bullish phase that resulted in BTC reaching $20,000 in December 2017.
Interestingly, the CEO of crypto hedge fund Pantera Capital Dan Moreheadsees a rising interest rate environment as a boost for Bitcoin and cryptocurrencies. The executive notes that stock investors will most likely choose cryptocurrencies that drive growth for digital assets.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.