In the wake of the FTX crash, a team led by Nikolaos Panigirtzoglou at JPMorgan estimated that the price of bitcoin may fall to $13,000. The declining cost of Bitcoin production is just another factor that may eventually lead to the currency’s demise.
The fundamental difficulty, according to JPMorgan’s experts, is not Sam Bankman Fried’s exchange, but the lack of organizations that can aid. They asserted:
“What makes this new phase of crypto deleveraging induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking.”
Will Bitcoin go down?
Some market participants may see this price as the “lower bound” of this crypto winter, which may have a negative impact on the price of bitcoin as an outcome of this event.
They pointed: “The decline in the production cost might be perceived as negative for the bitcoin price outlook going forward to the extent that the production cost is perceived by some market participants as the lower bound of the bitcoin’s price range in a bear market.”
A report by Bloomberg predicted that the current crash of the cryptocurrency market would escalate in the coming days, resulting in a further decrease in the value of bitcoin. FTX’s issue and Alameda Research’s disruption sparked a “cascade of margin calls” that might push the price of the leading cryptocurrency to $13,000.
In spite of the current uncertainty throughout the entire crypto sector, it was thought that things would settle down if Binance acquired the problematic FTX. However, on November 9th, the largest cryptocurrency exchange in the world reversed course, citing “issues beyond our control or ability to help” as their reason.
The statement sent more fear throughout the market, sending it down below $850 billion. For example, the price of Bitcoin fell to $15,500, a level not seen in two years.