Bitcoin bull Tim Draper extended his prediction on the price of the cryptocurrency. The venture capitalist and investor said the cryptocurrency would reach $250,000 by the end of 2022, but now he expects it to hit that level by mid-2023.
This year the cryptocurrency and the crypto market lost over 80% of their value and total market capitalization. A tightening macroeconomic landscape, a hawkish U.S. Federal Reserve (Fed), and high inflation triggered the decline in the price of Bitcoin. Still, Draper believes two key factors will resume the bull run.
Goods News For Bitcoin, But Bad News For Altcoins?
The venture capitalist is well-known in crypto for buying Bitcoin at a U.S. Marshals auction. At that time, the BTC price was hovering at around $1,000. Draper predicted that in three years, the price of the number one cryptocurrency would increase by 10-fold and reach $10,000.
This prophecy was fulfilled and was exceeded precisely three years later when the BTC price traded at $20,000. In an interview with CNBC, the venture capitalist said:
I have extended my prediction by six months. $250k is still my number. I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to become relics.
The crypto would need to overcome significant opposition to hit this number. In addition to a tightening macroeconomic environment, The collapse of trading venue FTX and hedge fund Three Arrows Capital (3AC).
These companies’ failure has negatively affected the confidence of investors. However, Draper believes that 2023 will see buying pressure for the cryptocurrency.
First, new users might jump into the market due to high inflation. Draper believes the imbalance between the number of men holding BTC versus the number of women will decrease.
Data provided by CNBC, according to a recent survey, indicates that 14% of men invest in digital assets versus 7% of women. The latter will invest in Bitcoin as they realize its potential to compound profits and defeat inflation. Draper said:
Retailers will save roughly 2% on every purchase made in bitcoin vs dollars. Once retailers realize that that 2% can double their profits, bitcoin will be ubiquitous.
The Best Years Are Yet To Come For BTC
In addition, Draper claims that the upcoming Bitcoin Halving, set for 2024, will operate as another bullish factor. In the past, this event has always preceded BTC’s next bullish cycle as the demand for the cryptocurrency declines while its supply decreases.
High inflation and lack of trust in the legacy financial system will fuel these two factors, Draper said:
Management of fiat is centralized and erratic. When a politician decides to spend $10 trillion, your dollars become worth about 82 cents. Then the Fed needs to raise rates to make up for the spend, and those arbitrary centralized decisions create an inconsistent economy.