Tim Draper Predicts BTC To Reach $250k Despite FTX Collapse

December 9, 2022 2:14 pm Comments

Even after a year of a bear market for the crypto industry and multiple major crypto firms like FTX filing for bankruptcy, it seems that there is still a lot of optimism for Bitcoin and other major digital assets.

Tim Draper is a venture capitalist who recently made the prediction that Bitcoin will reach $250k sometime in the middle of 2023.

The claim is quite strong given that the market is still being impacted by the fallout of major crypto firms and while the price of BTC is still at around $17k at the time of writing.

Draper solidified his claim with CNBC that this number would supposedly be reached and that the current situation would only cause temporary delays.

So far, the price of BTC has dropped by around 60% since the start of the 2022.

CNBC reports:

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

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

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

FTX’s demise has also worsened an already severe liquidity crisis in the industry. Crypto exchange Gemini and lender Genesis are among the firms said to be impacted by the fallout from FTX’s insolvency.

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

One of the main reasons that Draper is predicting such a price is because he believes that an asset like Bitcoin is considered a “quality” asset that is decentralized.

This is compared to other centralized assets that are usually manipulated in some form by a central entity in order to achieve an agenda.

Bitcoin on the other hand is not controlled for any personal interests and will act purely based on the market forces.

As a result, there may be a “flight of capital” that may take place where lots of wealth in the traditional system starts moving to the DeFi world.

Draper describes this “flight” as a ‘dam that is about to break’ and he also mentioned that there is an untapped market for women to also start utilizing it as it is currently unused by much of them today.

CNBC concludes:

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

“When people can buy their food, clothing and shelter all in bitcoin, they will have no use for centralized banking fiat dollars,” 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,” he added. Fiat currencies derive their worth from their issuing government, unlike cryptocurrencies.

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

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