The world’s first and biggest cryptocurrency could plummet as low as $5,000 in one scenario imagined by the banking group, as the bursting of the “crypto bubble” has ramifications throughout 2023.

“Yields plunge along with technology shares, and while the Bitcoin sell-off decelerates, the damage has been done,” writes the bank’s head of global research Eric Robertsen. 

The prediction was made as part of Standard Chartered’s annual list of surprises that analysts believe the markets may be overlooking or under-pricing.

Other possible upsets for the year ahead include a fall in oil prices, the impeachment of U.S. President Joe Biden, and a collapse in food prices.

The list, now in its eighth edition, is not intended to predict high-likelihood events but to consider situations with a non-zero chance of happening that are currently not part of market consensus.

If more crypto firms and exchanges find themselves running short of cash, the report said, investor confidence in crypto assets could collapse and send people back to the classic safe haven of gold.

As part of this scenario, gold could soar by 30%. The precious metal has received little love in 2022, falling 20% from its highs in March, but could benefit from a drop in crypto confidence.

Bitcoin follows broader tech decline

Standard Chartered also identified the possibility of a broader downturn in tech stocks, exceeding even the pummeling taken by many companies this year.

Values of companies on the Nasdaq 100 have declined by roughly 25% across 2022, but analysts compared this to the even bigger decline seen in the dot-com crash of the early aughts, suggesting more room to fall. 

Such a decline could be related to the woes in the crypto sector, researchers wrote.

“Perhaps echoing the contraction in the digital assets sector, next-generation technology companies see a surge in bankruptcies in 2023,” they said.

Meanwhile, early-stage companies may find it harder in this situation to get funding as financing costs rise and liquidity shrinks.