Bitcoin May Fall to $6K as Crypto Winter Intensifies, But Expect Recovery Next Year – Florian Grummes
(Kitco News) – As the crypto winter intensifies, Bitcoin could break below the $18,000 support level, which would cause the Bitcoin price to fall as low as $6,000, said Florian Grummes, CEO of Midas Touch Consulting.
“At some point I expect this $18,000 support level to break and then we could actually quickly lose another 30, 40 or 50 percent,” he said. “It would be the worst case that we go down to $6K.”
Over the course of the year, Bitcoin’s price has fallen by 60 percent, and Ethereum has fallen by 65 percent. Grummes said that mining will happen in 2023 and that 2024 could be “the start of a new bull market” as the Bitcoin Halving occurs.
Grummes spoke to Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News, at the Future Blockchain Summit in Dubai.
Crypto Winter Outlook
The bear market in cryptocurrencies caused a number of corporate failures, such as DeFi firm Celsius, crypto fund 3AC and blockchain company Terraform Labs.
Terraform Labs, for example, experienced a collapse in its stablecoin TerraUSD (UST) and its native token Luna, which wiped out $45 billion in market capitalization in a week.
These failures are necessary to cleanse the crypto market of inefficient or fraudulent companies.
“There has been so much fraud, and so many bad projects in this sector, and we have to get rid of them,” he told Makori. “It’s very painful, I understand, especially for the heads … but it takes time to weed out all these bad actors.”
However, Grummes said that based on the time span of previous bear markets, a recovery is expected in 2023.
“Typically, crypto winters last 20 to 27 months… so expect at least another six months, or maybe a year, and then the Bitcoin halving in 2024 will bring some light, and maybe the start of a new bull market,” he explained.
Bitcoin Halving will halve the supply of new Bitcoins, as well as the reward for mining them. This is expected to make Bitcoin more valuable, and may have positive spillover effects benefiting altcoins.
“Digital Slavery”
Grummes pointed out that despite the crypto winter, nations are developing their own official digital currencies, which will be controlled and issued by central banks. The Federal Reserve, for example, intends to issue its own digital token, FedCoin.
Critics of these “central bank digital currencies” (CBDCs) argue that CBDCs would invade privacy and be used to financially punish political dissidents, since the government would be able to fully track, trace and control these digital tokens.
According to the Atlantic Council, 105 countries are developing CBDCs.
“If [CBDCs] happens, we’re all going to be digital slaves,” Grummes said. “They’re trying to position CBDCs as a form of cryptocurrency, but at the end of the day it’s the same form of money that we already have, [except] it’s controllable money, similar to what they have in China with the social credit system.”
Grummes highlighted the risks of CBDC for well-functioning democracies.
“If some unelected central bankers can create money out of thin air, and then track how you spend your money, where you spend it … and also dictate what kind of interest you earn and dictate what you can do with it, I think it’s not a very nice view for all of us.”
To find out Grummes’ outlook for gold and Bitcoin, watch the video above
To find out how Di Iorio intends to contribute to the further decentralization of Bitcoin and Ethereum, watch the video above.
Follow Michelle Makori on Twitter: @MichelleMakori
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