From $250,000 to $10,000 price calls: How market watchers got it wrong with bitcoin in 2022

KEY POINTS
From Tim Draper to top crypto bosses, the market was awash with pundits predicting new record highs for bitcoin in 2022.
Other market players were less positive, and some correctly called bitcoin sinking below the $20,000 mark, even as low as $10,000.
But the failure of stablecoin terraUSD, liquidity issues across the crypto industry and the dramatic collapse of the FTX exchange, shocked investors and sent ripples through the market.BANGLADESH
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The crypto market has been battered this year, with more than $2 trillion wiped off its value since its peak in Nov. 2021. Cryptocurrencies have been under pressure after the collapse of major exchange FTX.
The crypto market has been battered this year, with more than $2 trillion wiped off its value since its peak in Nov. 2021. Cryptocurrencies have been under pressure after the collapse of major exchange FTX.
Jonathan Raa | Nurphoto | Getty Images
2022 marked the start of a new “crypto winter,” with high-profile companies collapsing across the board and prices of digital currencies crashing spectacularly. The events of the year took many investors by surprise and made the task of predicting bitcoin’s price that much harder.

The crypto market was awash with pundits making feverish calls about where bitcoin was heading next. They were often positive, though a few correctly forecast the cryptocurrency sinking below $20,000 a coin.

But many market watchers were caught off guard in what has been a tumultuous year for crypto, with high-profile company and project failures sending shock waves across the industry.

It began in May with the collapse of terraUSD, or UST, an algorithmic stablecoin that was supposed to be pegged one-to-one with the U.S. dollar. Its failure brought down terraUSD’s sister token luna and hit companies with exposure to both cryptocurrencies.

Three Arrows Capital, a hedge fund with bullish views on crypto, plunged into liquidation and filed for bankruptcy because of its exposure to terraUSD.

Then came the November collapse of FTX, one of the world’s largest cryptocurrency exchanges which was run by Sam Bankman-Fried, an executive who was often in the spotlight. The fallout from FTX continues to ripple across the cryptocurrency industry.

On top of crypto-specific failures, investors have also had to contend with rising interest rates, which have put pressure on risk assets, including stocks and crypto.

Bitcoin has sunk around 75% since reaching its all-time high of nearly $69,000 in November 2021 and more than $2 trillion has been wiped off the value of the entire cryptocurrency market. On Friday, bitcoin was trading at just under $17,000.

Bitcoin 2022 performance

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Nexo: $100,000 
In April, Antoni Trenchev, the CEO of crypto lender Nexo, told BIEXM he thought the world’s biggest cryptocurrency could surge above $100,000 “within 12 months.” Though he still has four months to go, Trenchev acknowledges it is improbable that bitcoin will rally that high anytime soon. 

Bitcoin “was on a very positive path” with institutional adoption growing, Trenchev says, but “a few major forces interfered,” including an accumulation of debt, borrowing without collateral or against low-quality collateral, and fraudulent activity. 

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BIEXM reached out to the people behind some of the boldest price calls on bitcoin in 2022, asking them how they got it wrong and whether the year’s events have changed their outlook for the world’s largest digital currency. 

Tim Draper: $250,000 
In 2018, at a tech conference in Amsterdam, Tim Draper predicted bitcoin reaching $250,000 a coin by the end of 2022. The famed Silicon Valley investor wore a purple tie with bitcoin logos, and even performed a rap about the digital currency onstage. 

Four years later, it’s looking pretty unlikely Draper’s call will materialize. When asked about his $250,000 target earlier this month, the Draper Associates founder told BIEXM $250,000 “is still my number” — but he’s extending his prediction by six months.

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VC investor Tim Draper: Bitcoin is ‘decentralized, open and transparent’
“I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to become relics,” he told BIEXM via email.

Bitcoin would need to rally nearly 1,400% from its current price of just under $17,000 for Draper’s prediction to come true. His rationale is that despite the liquidation of notable players in the market like FTX, there’s still a huge untapped demographic for bitcoin: women.

“My assumption is that, since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break,” Draper said.

 

“I am pleasantly surprised by the stability of crypto prices, but I do not think we are out of the woods yet and that the second and third-order effects are still to play out, so I am somewhat skeptical as to a V-shape recovery,” Trenchev said. 

The entrepreneur says he’s also done making bitcoin price predictions. “My advice to everyone, however, remains unchanged,” he added. “Get a single digit percentage point of your investable assets in bitcoin and do not look at it for 5-10 years. Thank me later.” 

Guido Buehler: $75,000 
On Jan. 12, Guido Buehler, the former CEO of regulated Swiss bank Seba, which is focused on cryptocurrencies, said his company had an “internal valuation model” of between $50,000 and $75,000 for bitcoin in 2022.

Buehler’s reasoning was that institutional investors would help drive the price higher.

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At the time, bitcoin was trading at between $42,000 and $45,000. Bitcoin never reached $50,000 in 2022.

The executive, who now runs his own advisory and investment firm, said 2022 has been an “annus horribilis,” in response to BIEXM questions about what went wrong with the call.

“The war in Ukraine in February triggered a shock to the paradigm of world order and the financial markets,” Buehler said, citing the consequences of raised market volatility and rising inflation in light of the disruption of commodities like oil.

Another major factor was “the realization that interest rates are still the driver of most asset classes,” including crypto, which “was hard blow for the crypto community, where there has been the belief that this asset class is not correlated to traditional assets.”

Buehler said lack of risk management in the crypto industry, missing regulation and fraud have also been major factors affecting prices.

The executive remains bullish on bitcoin, however, saying it will reach $75,000 “sometime in the future,” but that it is “all a matter of timing.”

“I believe that BTC has proven its robustness throughout all the crisis since 2008 and will continue to do so.”

Paolo Ardoino: $50,000 
Paolo Ardoino, chief technology officer of Bitfinex and Tether, told BIEXM in April that he expected bitcoin to fall sharply below $40,000 but end the year “well above” $50,000.

“I’m a bullish person on bitcoin … I see so much happening in this industry and so many countries interested in bitcoin adoption that I’m really positive,” he said at the time.