Investors see $12,000 to $30,000

After a tumultuous 2022, crypto investors are trying to figure out when the next bitcoin bull could take place.

Last week, at a crypto conference in St. Moritz, Switzerland, CNBC spoke to industry insiders who painted a picture of 2023 as a year of caution. Bitcoin has been expected to trade in some, being sensitive to macroeconomic conditions such as interest rates rise and continue to be volatile. A new bull is unlikely in 2023.

However, experts look to next year and beyond with optimism.

By 2022, the entire cryptocurrency market is expected to lose about $1.4 trillion in value with the industry facing liquidity problems and peak bankruptcy due to the collapse of the FTX exchange. Contagion is spreading throughout the industry.

While bitcoin has had a small bump at the beginning of the year, in line with risk assets like stocks, experts say that bitcoin is unlikely to retest the all-time high of just $69,000 but may be below.

“I think there will be less, but I don’t think there will be much,” Bill Tai, a venture capitalist and crypto veteran told CNBC last week.

“There is a possibility [bitcoin] it’s kind of gone down here,” adding that it could drop to $12,000 before jumping back up.

Meltem Demirors, chief strategy officer at CoinShares, said bitcoin is likely to trade rangebound at the lower end between $15,000 and $20,000 and at the upper end between $25,000 to $30,000.

He said that much of the “forced selling” that occurred in 2022 as a result of the collapse in the market is now over, but not much new money is flowing into bitcoin.

“I don’t think there’s going to be a lot of forced selling, which is optimistic,” Demirors told CNBC on Friday. “But again, I think the value is pretty limited, because we’re not seeing a lot of new inflows either.”

Investors also monitor macroeconomic conditions. Bitcoin has proven to be closely related to risk assets such as stocks, and in particular, heavy technology. Nasdaq. These assets are affected by changes in interest rates from the Federal Reserve and other macroeconomic movements. Last year, the Fed embarked on an aggressive path of interest rate hikes to try to tackle inflation, which has hurt risk assets along with bitcoin.

Industry insiders say changes in macro conditions could help bitcoin.

“There may be catalysts that we don’t realize, again, the macro situation and the political environment are quite uncertain, inflation continues to heat up, I think it’s a new thing. We haven’t seen it, you know, in 30, 40 years,” said Demirors.

“So who knows, as people look to make allocations into the new year where crypto will fit into their portfolios?”

In a CNBC interview, several industry participants talked about the historical bitcoin cycle, which occurs approximately every four years. Typically, bitcoin will reach an all-time high, then have a massive correction. There will be bad years and then mild recovery years.

Then the “halving” will happen. This is when miners, who run special machines to effectively validate transactions on the bitcoin network, see their reward for mining cut in half. Miners earn bitcoins as a reward for validating transactions. The halving, which happens every four years, effectively reduces the supply of bitcoins to the market. There will be only 21 million bitcoins in circulation.

Halving usually precedes the bull run. The next midterm event takes place in 2024.

Scaramucci called 2023 a “recovery year” for bitcoin and predicted it could trade at $50,000 to $100,000 in two to three years.

“You take risks but you also believe [bitcoin] adoption. So if we get the adoption right, and I’m sure we will, this could easily be a fifty to a hundred thousand dollar asset in the next two to three years,” Scaramucci said.

Meanwhile, Tai said the start of the bull run is “probably a year away,” saying the effects of the FTX collapse could be felt in six to nine months.

Jean Baptiste Graftieaux, CEO of global cryptocurrency exchange Bitstamp, told CNBC last week that the next bull run could come over the next two years, citing rising interest from institutional investors.

However, Demirors warned that the events of 2022 “have caused tremendous reputational damage to the industry and the asset class,” adding that “it will take some time for the confidence to return.”