After a difficult 2022, cryptocurrency investors are trying to figure out when the next bitcoin bull run will happen.
Last week, Switzerland’s St. At a crypto conference in Moritz, CNBC spoke with industry insiders who painted 2023 as a backup year. Bitcoin is expected to trade in a range, be sensitive to macroeconomic conditions such as interest rate hikes, 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 approximately $1.4 trillion with the industry facing liquidity problems and the bankruptcy of exchange FTX. The infection spread throughout the industry.
While bitcoin took a small hit earlier in the year in line with riskier assets such as stocks, experts say it is unlikely to retest the all-time high below $69,000, but could bottom out.
“I think there’s a little bit more downside, but I don’t think there will be much,” venture capitalist and cryptocurrency veteran Bill Tai told CNBC last week.
“There is such a chance [bitcoin] it’s kind of bottomed out here,” he said, adding that it could drop as low as $12,000 before climbing back up again.
CoinShares chief strategist Meltem Demirors said bitcoin could trade between $15,000 and $20,000, with an upper end between $25,000 and $30,000.
He said that much of the “forced selling” caused by market crashes in 2022 is already over, but that not much new money has flowed into bitcoin.
“I don’t think there’s a lot of forced selling left, which is optimistic,” Demirors told CNBC on Friday. “But I still think the upside is pretty limited because we’re not seeing a lot of new inflows.”
Investors are also paying attention to the macroeconomic situation. Bitcoin has proven to be closely related to risky assets like stocks and especially tech-heavy ones. Nasdaq. These assets are affected by changes in Federal Reserve interest rates and other macroeconomic movements. Last year, the Fed embarked on an aggressive rate hike to tame inflation, which hurt risk assets along with bitcoin.
Industry insiders said the change in the macro situation could help bitcoin.
“There may be catalysts that we don’t know about, again, the macro situation and the political environment is quite uncertain, inflation continuing to be quite hot, I think, is something new. We haven’t seen it, you know, 30, 40 years from now,” Demirors said.
“So who knows, people are trying to make allocations going into the new year where cryptocurrency will fit into that portfolio?”
The next bitcoin bull run is being timed
In interviews with CNBC, several industry participants talked about the historical bitcoin cycles that occur approximately every four years. Typically, bitcoin will hit an all-time high, then have a massive correction. It will be a bad year and then a year of mild recovery.
Then the “halving” will happen. This sees miners running special machines to effectively confirm transactions on bitcoin networks halving their mining rewards. Miners receive bitcoins as a reward for confirming transactions. The halving, which occurs every four years, effectively slows down the supply of bitcoin to the market. There will only be 21 million bitcoins in circulation.
Halving usually precedes a bull run. The next halving event occurs in 2024.
Scaramucci called 2023 a “recovery year” for bitcoin and predicted it could trade between $50,000 and $100,000 within two to three years.
“You take a risk, but you also believe in it [bitcoin] adoption. So if we get the adoption right, and I believe in the next two to three years, it could easily be a fifty to a hundred thousand dollar asset,” Scaramucci said.
Tai, meanwhile, said the start of the bull run is “probably a year away” and the after-effects of the FTX collapse could continue to be felt for another six to nine months.
Jean-Baptiste Graftieaux, global CEO of cryptocurrency exchange Bitstamp, told CNBC last week that the next bull run could happen within the next two years, based on increased interest from institutional investors.
However, Demirors warned that the events of 2022 “caused huge reputational damage to the industry and the asset class”, adding that “it will take some time to restore that confidence”.
