VanEck Predicts That Bitcoin Will Plummet To $10,000 By the First Quarter Of 2023
A wave of miner bankruptcies may keep bitcoin under pressure in the first quarter of 2022, according to VanEck’s Matthew Sigel, who predicts a bull run in the second half of the year.
The prognosis for risk assets appears positive following Tuesday’s US inflation report, which confirmed the Federal Reserve’s (Fed) predicted slowing of liquidity tightening.
According to financial firm VanEck, Bitcoin (BTC) may continue under pressure as several miners go bankrupt, overshadowing better macroeconomic conditions.
“Bitcoin will hit $10,000-$12,000 in Q1 amid a wave of miner bankruptcy, marking the low point of the crypto winter,” Matthew Sigel, VanEck’s head of digital assets research, predicted in the 2023 forecast.
Bitcoin miners, or those in charge of creating coins, have been caught between increased operational costs and dropping bitcoin values this year.
Miners’ profits are tightly linked to the price of bitcoin since they receive the cryptocurrency as a reward for solving complicated mathematical puzzles to validate transactions on the blockchain.
As a result, when the price falls by 61% this year, it leads to miner capitulation – a situation in which weak miners abandon the market, surrendering their reserves and forcing the price to fall even further. In the worst-case situation, surrender might result in a death spiral.
Miners have been depleting their coin reserves in order to cope with the current market conditions. According to Glassnode, the amount in miner wallets has dropped by over 25,000 BTC ($444 million) since July, reaching a 14-month low of 1.818 million BTC.
A drop to $12,000 would be an 82% decrease from the record high of $69,000 set in November 2021. The preceding two bear markets peaked at 85% below their respective record highs.
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