The bitcoin price has crashed to levels not seen since November 2020 while the ethereum price has dropped back to around $1,000 per ether—with some predicting those that survive could become the future technology giants. The rest of the crypto top ten—BNB, XRP, solana, cardano and dogecoin—are faring equally as badly.
Now, Wall Street giant Deutsche Bank has issued a bullish bitcoin price prediction—forecasting the $2 trillion crypto crash could be coming to an end and comparing bitcoin to the $72 billion-a-year diamond industry.
Want to stay ahead of the market and understand the latest crypto news? Sign up now for the free CryptoCodex—A daily newsletter for traders, investors and the crypto-curious
The bitcoin price could rebound to almost $30,000 by the end of the year, Deutsche Bank analysts wrote in a note seen by Bloomberg, pointing to bitcoin’s close conformity to the U.S. stock market and suggesting bitcoins are more similar to diamonds than the digital gold it’s usually compared to.
“By marketing an idea rather than a product, [diamond giant De Beers] built a solid foundation for the $72 billion-a-year diamond industry, which they have dominated for the last eighty years. What’s true for diamonds, is true for many goods and services, including bitcoins,” the analysts wrote, predicting the S&P 500 could return to January levels by the end of 2022, boosting the bitcoin price.
Bitcoin’s reputation as digital gold—a safe-haven asset that would perform like gold in periods of uncertainty—has taken a beating this year as the bitcoin price has collapsed in the face of soaring inflation and the rising risk of a global recession. For comparison, gold has held up much better.
However, Deutsche’s analysts go on to warn that the crypto crash could continue for some time more due to “the system’s complexity” and lack of “valuation models.”
Sign up now for CryptoCodex—A free, daily newsletter for the crypto-curious
“Stabilizing token prices is hard because there are no common valuation models like those within the public equity system,” they wrote. “In addition, the crypto market is highly fragmented.”
The mood among those in the bitcoin and crypto community is bleak following bitcoin’s latest crash under $20,000—with some predicting there may be more pain to come as investors rush to withdraw their cryptocurrency from lenders and hedge funds face a liquidity crisis.
“If bitcoin is unable to retain its lower-end support of $20,000, the next closest support will be found at $16,000,” Sam Kopelman, the U.K. manager at crypto exchange Luno, wrote in emailed comments.
“The market is also paying close attention to how the current imbalances—a combination of defaults and bank runs—are resolved, restraining bitcoin’s ability to see substantial recovery.”