According to venture capitalist, Tim Draper, bitcoin will hit $250,000 a coin by the middle of 2023.
“I have extended my prediction by six months. $250k is still my number,” Draper told CNBC via email.
Since the beginning of the year, cryptocurrency has gone down by more than 60%.
FTX’s demise has worsened an already intense 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.
Still, Draper believes that bitcoin will soar in the coming year.
“I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to become relics,” he told CNBC.
Draper is the founder of Draper Associates and is one of Silicon Valley’s best-known investors.
In 2014, Draper purchased 29,656 bitcoins confiscated by U.S. Marshals from the Silk Road dark web marketplace for $18.7 million. That year, he predicted the price of bitcoin would go to $10,000 in three years. Bitcoin went on to climb close to $20,000 in 2017.
However, not all his predictions have been true. He invested in Theranos, a health startup that falsely claimed it was able to detect diseases with a few drops of blood. Elizabeth Holmes, Theranos’ founder, has been sentenced to 11 years in prison for fraud.
“My assumption is that, since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break,” Draper said.
According to a survey conducted for CNBC and Acorns by Momentive, twice as many men as women invest in digital assets (16% of men vs. 7% of women).
“Retailers will save roughly 2% on every purchase made in bitcoin vs dollars,” Draper added. “Once retailers realize that 2% can double their profits, bitcoin will be ubiquitous.”
“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, their dollars become worth about 82 cents. Then the Fed needs to raise rates to make up for the spending, and those arbitrary centralized decisions create an inconsistent economy,” he added.
