Tim Draper Predicts Bitcoin Will Hit $250,000 Despite FTX Fall

Venture capitalist Tim Draper thinks bitcoin will hit $250,000 a coin by mid-2023, even after a difficult year for crypto marked by industry failures and falling prices.

Draper had previously predicted that bitcoin would hit $250,000 by the end of 2022, but in early November, at the Web Summit tech conference in Lisbon, he said it would take until June 2023 for this to happen. real.

He reaffirmed this view on Saturday when asked how he felt about his price call following the crash of FTX.

“I extended my prediction by six months. $250,000 is still my number,” Draper told CNBC via email.

Bitcoin would need to rise nearly 1,400% from its current price of around $17,000 for Draper’s prediction to come true. The cryptocurrency has dropped more than 60% since the start of the year.

Digital currencies are in the doldrums as tighter monetary policy from the Fed and the chain reaction of bankruptcies at major industrial companies including Terra, Celsius, and FTX have put pressure on force on prices.

The collapse of FTX also exacerbated an already severe liquidity crisis in the industry. Gemini crypto exchange and Genesis lender is between firms is said to be affected by the consequences of FTX’s insolvency.

Last week, veteran investor Mark Mobius told CNBC that bitcoin can be reduced to $10,000 next year, down more than 40% from current prices. The Mobius Capital Partners co-founder correctly called the drop to $20,000 this year.

However, Draper is convinced that bitcoin, the world’s largest cryptocurrency, will appreciate in the new year.

“I would expect a flight to quality and decentralized crypto like bitcoin and some of the weaker coins to be relic,” he told CNBC.

Draper, the founder of Draper Associates, is one of Silicon Valley’s most famous investors. He has made successful bets on technology companies including TeslaSkype and Baidu.

In 2014, Draper purchased 29,656 bitcoins seized by US police from the dark web of the Silk Road for $18.7 million. That year, you guess Bitcoin price will go up to $10,000 in three years. Bitcoin continued to rise to nearly $20,000 in 2017.

However, some of Draper’s other bets failed. He invest in Theranos, a health startup falsely claims that it can detect disease with just a few drops of blood. Elizabeth Holmes, founder of Theranos, was sentenced to 11 years in prison to cheat.

Cryptocurrencies have There has long been a gender disparity problem. According to a survey conducted for CNBC and Acorns by Momentive, the number of men investing in digital assets is twice as high as women (16% of men versus 7% of women).

Draper added: “Retailers will save about 2% per purchase in bitcoin versus dollars.” “Once retailers realize that 2% can double their profits, bitcoin will be popular.”

payment intermediaries like Passport and MasterCard currently charges as high as 2% each time a credit cardholder uses their card to pay for something. Bitcoin provides a way for people to bypass the middlemen.

However, using the digital currency for everyday spending is difficult, as its price is volatile and the coin is not widely accepted as a currency.

“When people can buy their food, clothing, and shelter with bitcoin, they won’t need to use centralized bank fiat dollars,” said Draper.

“Fiat management is centralized and erratic. When a politician decides to spend $10 trillion, your dollars will be worth about 82 cents. Then the Fed needs to raise interest rates. to offset spending and those arbitrarily centralized decisions that create an inconsistent economy,” he added. Fiat currencies derive their value from their issuing government, unlike cryptocurrencies.

Meanwhile, the so-called next Bitcoin halving — cutting bitcoin rewards for bitcoin miners — in 2024 will also boost the cryptocurrency, according to Draper, as it chokes off supply over time. The total number of bitcoins that will be mined is capped at 21 million.