VanEck’s Bitcoin prediction is $10K-$12K by Q1 2023
VanEck is one of a handful of companies that continue to fight for approval of a Bitcoin Spot ETF. The American investment management company received a resounding rejection from the US Securities and Exchange Commission in November 2021 after a three-year battle.
Just six months later, on June 24 of this year, VanEck reapplied for approval of a physical-backed Bitcoin ETF. The SEC’s decision is currently pending.
Despite this support, the investment firm has issued a bearish prediction for BTC into the first quarter of 2023. Matthew Sigel, head of digital asset research at VanEck, shared this assessment in a recent media presentation.
BTC price may fall to $10,000
“Looking ahead, Bitcoin could test $10,000-$12,000 as Bitcoin miner bankruptcies increase due to falling Bitcoin value and rising electricity costs,” predicts VanEck.
The investment company believes that many miners will be forced to restructure or merge to find capital in difficult times. As Siegel explained, the mining industry is under tremendous stress.
We have an index that follows the listed companies in this sector; the median market cap is now under $200 million, and each of these companies is burning cash and trading well below book value.
In recent months, BTC has been trading as a risk asset, Siegel said. What is surprising for the company, however, is the sensitivity to higher interest rates.
VanEck sees a reason for this in political reactions to inflation in developed countries, which have limited energy prices and extended sanctions against Russia. This has been a difficult proposition for Bitcoin mining, Sigel elaborated.
Still, VanEck is optimistic that the BTC price could return to $30,000 in the second half of 2023 as inflation subsides. Looking ahead, the investment firm points to the halving in 2024, an event that traditionally drives up BTC’s value.
Bitcoin Miner Capitulation in full swing
As NewsBTC reported, the second Bitcoin miner capitulation in a cycle has already started two weeks ago. Charles Edwards of Capriole Investments reported on November 28 that the hash tapes had confirmed the start of the capitulation.
Glassnode’s latest “Bitcoin miner net position change” data shows that miners have been selling aggressively over the past two weeks, to a degree that historically has only been higher in early 2021.
Historically, the miner capitulation has lasted an average of 48 days, so an end to the selling pressure can be predicted by mid-January 2023. However, this is not in line with VanEck’s Bitcoin prediction, which predicts a longer bear market.
Despite miners clearly giving up their BTC holdings in the past week, the interesting thing about this at the moment is that the price of BTC is showing an upward trend.
At press time, BTC was trading at $17,882, with today’s FOMC meeting starting at 2:30 PM ET, which is likely to have a significant impact on price action in the coming weeks.
