December is the time of year when city experts are on the lookout for potential surprises in the year ahead. While their holiday season warnings are not complete forecaststhey often contain some of the most tantalizing prospects for market watchers.
This year, Standard charter says it’s possible that one of the most traditional stores of wealth is well positioned to ride out the storm on one of the newest global asset classes. Gold could be on the verge of taking off in 2023 if the collapse in crypto assets, including BitcoinCarry on.
The eye-catching prediction comes after a torrid time for investors and crypto exchanges, which are still reeling from the shockwaves of the dramatic collapse of fallen industry darling FTX.
In the bank’s annual report on improbable but not impossible so-called “black swan events,” Eric Robertsen, its global head of to research and chief strategist, develops the following scenario:
“Gold makes a stunning recovery in 2023, rallying 30% to over $2,250/oz as cryptocurrencies fall further and more crypto businesses succumb to liquidity shortages and withdrawals from investors.
“More and more crypto companies and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets. Gold is seeing an increase in demand from retail and institutional investors, as well as sovereign countries seeking to bolster their reserves.
One thing is certain: the year has been dramatic for Bitcoin. Here’s a look at the price action of the most-watched cryptocurrency, in a year where digital currency exchanges crashed, reputations were won and lost, and fortunes vanished at the fastest rate seen on world markets.
Crypto investors and crypto exchange operators are still licking their wounds from the fallout from the FTX collapse.
The price of Bitcoin has fallen nearly 25% in the past month as crypto lender Genesis warned it could be on the verge of insolvency. At least a dozen crypto firms have gone bankrupt or suspended customer withdrawals since the start of the year, raising concerns that the future of the entire industry could be in jeopardy, on about to suffer the same fate as investment bank Lehman Brothers earlier this year. the financial crash of 2008.
A number of crypto exchanges, like Seychelles-based OKX, have been desperate to prove that they are not the same as FTX, and have promised to back customer deposits with similar caveats and bring in third-party audits in a desperate attempt to preserve the industry’s crumbling credibility. Financial regulators around the world are scrambling to prove their increased focus on the crypto industry, with a barrage of new regulations being put in place to put a leash on the entire sector.
But some of FTX’s rivals seem to have gotten a little boost from the whole saga, as former FTX customers rushed to withdraw their funds and deposit them on more transparent crypto exchanges with less shady reputations. They are adamant that the collapse of a shoddy crypto firm is only good news for the longevity of a reputable company.
“It’s possible the full ramifications haven’t kicked in yet,” said Tom Duff Gordon, vice president of international policy at Coinbase, who said the company has benefited from increased activity in recent days. following a “leak to quality,” adding that he had “de minimis” exposure to FTX.
“We saw a bad actor and alleged fraud and it’s not something unique to crypto.
“There will be a short-term reduction in confidence for the sector [but] if that has the effect of removing some bad players from the market…then I actually think we can come out stronger.