When Finder polled its panel of crypto and fintech specialists in January 2023, they weren’t so bullish on Bitcoin (BTC).
Their average price prediction for BTC by the end of 2023 was US$26,844.
But in Finder’s April 2023 Bitcoin (BTC) price prediction survey, our panelists were singing a different tune.
Optimism About The Price Of Bitcoin
In this survey, the average price they thought BTC would hit by the end of 2023 was US$35,458, a number 30% higher than January’s.
So, why do our panelists think BTC might be worth more by year end 2023 than they predicted just four months prior?
Here are a few reasons:
Reason #1: Loss Of Trust In Banks
Many of our panelists believe that investors have been buying Bitcoin (BTC) because they’ve lost faith in banks in the wake of the collapse of three US banks: Silvergate Bank, Silicon Valley Bank and Signature Bank.
“The reason for Bitcoin has never been stronger,” says Aaron Referty, CEO and co-founder of StandardDAO. “Assets in banking institutions are insecure, and people are beginning to see the lack of security with banks.”
Carlo Di Clemente, COO of GroveToken Limited, agrees with Raferty and believes that “the loss of trust in banks has had a positive effect on Bitcoin adoption in 2023.”
Rishabh Gupta, director of TDeFi, believes that “[the price of] Bitcoin has proven to be negatively correlated with the failure of traditional financial institutions. While banks have collapsed, Bitcoin adoption is increasing amongst institution[al] and retail investors.”
Reason #2: A Hedge Against Inflation
The US Federal Reserve (the Fed) in conjunction with the US Treasury have tried to calm the anxiety of bank depositors by assuring investors that the two institutions will work together to ensure that all bank deposits in the US are insured.
Only up to US$250,000 per bank account is insured under the Federal Deposit Insurance Corporation (FDIC). However, given that the FDIC only has about $100 billion in its fund, while there’s approximately $17 trillion in bank deposits in the US, further backstopping of banks will be necessary if more banks fail.
Many have interpreted the Fed’s Bank Term Funding Program (BTFP) – which was designed to provide liquidity to banks at risk of not meeting their depositors’ withdrawal requests – as a new form of quantitative easing (QE).
So, with the Fed injecting liquidity (money) into the system again, many are starting to believe that we won’t see inflation back down to 2% – the Fed’s target rate – anytime soon.
“While there’s plenty of arguments against Bitcoin as an inflation hedge, the market is telling a different story,” claims Nicole DiCicco, CEO of CryptoConsultz. “Bitcoin’s fixed supply means that it cannot be subject to the same inflationary pressures as traditional currencies making it immune to dilution vulnerabilities.”
François Cluzeau, head of trading at Flowdesk, is on the same page as DiCicco, as he thinks “the ‘prophecy’ that Bitcoin is an anti-inflation product may be working these days.”
Martin Froehler, CEO of Morpher, also believes that investors are buying BTC as a hedge against inflation.
Froehler thinks the rise in BTC’s price from March to April has been caused by “smart money looking for a hedge against inflation.”
Froehler also believes that investors are buying BTC due to “systemic risks in the financial system” — which brings us to our third reason.
Reason #3: Systemic Risks In The Traditional Financial System (Beyond Banking)
Beyond issues with the banking system in the US, some of our panelists felt that BTC’s price would rise by year end 2023 as more people withdrew their money from the traditional financial system and invested it in BTC.
“Traditional finance [is] experiencing troubles [that] resemble the causes that brought about the 2008 crisis – [which] brought about the invention of Bitcoin in the first place,” shares Cluzeau. “The narrative and original ethos of Bitcoin seems to be working.”
Kadan Stadelmann, CTO of Komodo Platform, shares a view similar to Cluzeau’s.
“[Bitcoin] delivers a long-overdue reality check to the traditional financial system,” claims Stadelmann. “As the world teeters on the brink of yet another financial meltdown, Bitcoin offers a glimmer of hope.”
We’re Getting Close
At the time of writing, BTC’s price was just under US$30,000.
This brings it within US$6,000 of striking range for the average price our panelists predicted BTC will hit by the end of 2023.
If investors continue to withdraw money from banks and the traditional financial system more broadly and opt to invest it in BTC, it would hardly be surprising to see the price of bitcoin back in the vicinity of US$35,458.
Time will tell, though, as there are still 7 months until the year is out, and given how uncertain economic and financial conditions are around the globe, the one thing that we can likely be sure of is that we’ll continue to see more volatility in the price of bitcoin before – or after – it potentially hits $36,000 per coin this year.