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

Tim Draper Predicts Bitcoin Will Hit $250,000 Despite FTX Crash
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Tim Draper, founder of Draper Associates, on stage at the Web Summit 2022 technology conference.

Ben McShane | Sportsfile via Getty Images

Venture capitalist Tim Draper thinks bitcoins it will reach $250,000 per coin by mid-2023, even after a difficult year for the cryptocurrency marked by industry failures and falling prices.

Draper previously predicted that Bitcoin would top $250,000 by the end of 2022, but in early November at the Web Summit technology conference in Lisbon, he said it would take until June 2023 for this to materialize.

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

“I’ve extended my prediction by six months. $250k 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 plunged more than 60% since the beginning of the year.

Digital currencies are in the doldrums as tighter monetary policy by the Federal Reserve and a chain reaction of bankruptcies at major companies in the industry, including Terra, Celsius and FTX, have put intense price pressure.

FTX’s demise has also worsened an already severe liquidity crisis in the industry. The Gemini cryptocurrency exchange and the Genesis lender are between the signatures it is said to have been affected by the fallout from FTX’s insolvency.

Last week, veteran investor Mark Mobius told CNBC that bitcoin could drop to $10,000 next year, a drop of 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 rise in the new year.

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

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Draper, the founder of Draper Associates, is one of Silicon Valley’s best-known investors. He made successful bets on technology companies, including teslaskype and Baidu.

In 2014, Draper bought 29,656 bitcoins seized by US Marshals from the Silk Road dark web market for $18.7 million. That year, the foretold the bitcoin price would rise to $10,000 in three years. Bitcoin went on to climb close to $20,000 in 2017.

However, some of Draper’s other bets have turned sour. The invested in Theranos, a healthcare startup that falsely claimed it could detect disease with a few drops of blood. Elizabeth Holmes, the founder of Theranos, has been Sentenced to 11 years in prison for fraud

‘The dam is about to break’

Draper’s justification for breaking bitcoin next year is that there remains a massive untapped demographic for bitcoin: women.

“My guess is that since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently in the hands of women, the dam is about to burst,” Draper said.

crypto has for a long time had a gender disparity issue. 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 approximately 2% on every purchase made in bitcoin vs. dollars,” Draper added. “Once retailers realize that 2% can double their profits, Bitcoin will be ubiquitous.”

Payment intermediaries such as Visa Y MasterCard They currently charge fees of up to 2% every time credit card holders use their card to pay for something. Bitcoin offers a way for people to bypass middlemen.

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

“When people can buy their food, clothing and housing in bitcoin, they will have no use for central banking fiat dollars,” Draper said.

“Fiat money management is centralized and erratic. When a politician decides to spend $10 trillion, his dollars are worth about 82 cents. The Federal Reserve then needs to raise rates to offset the spending, and those arbitrary centralized decisions create inconsistent economics ,” he added. Fiat currencies derive their value from their issuing government, unlike cryptocurrencies.

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

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