Why bitcoin could collapse to $12 000. Analyst Cowen’s opinion

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What’s new? Cryptocurrency analyst Benjamin Cowen said that the bitcoin rate is likely to fluctuate between $12 000 and $35 000 by the end of 2023. He believes this assumption is the most accurate, but stressed that he could be wrong. Cowen also noted a downward trend in the asset’s returns, suggesting it will continue. As of May 18, 10:20 UTC, BTC to USDT is trading at $27 414 on Binance, having gained 2,06% in 24 hours, the asset has barely changed over the week, a drop of 0,1%, according to aggregator CoinGecko.

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Analyst’s prediction. Cowen believes that the BTC rate increase should be expected in the first half of this year, while in the second half, the asset is likely to trade lower amid negative sentiment related to the likelihood of a recession. In addition, according to the expert, from one cycle to another bitcoin’s returns will decrease. He believes that “even in the pre-halving years, I think it’s worthwhile to consider that you’ll likely see some form of diminishing returns.”

Cut in half of the reward to miners for a mined block (halving), embedded in bitcoin’s code, occurs about every 4 years and is intended to reduce inflation of the asset by reducing the volume of coins coming into circulation. The next halving is expected in April-May 2024, the award will be reduced to 3k125 BTC. That said, as of May 18, more than 19,3 million bitcoins have already been issued, while the total supply is programmatically limited to 21 million.

Cowen explained the diminishing returns of the digital asset with examples from previous market cycles. In 2019, for example, bitcoin went up by 341% from its 2018 low, and from its 2022 low it has gone up about 100%.

In March, Cowen also predicted bitcoin price fluctuations based on historical data from 2015 and 2019. In his opinion, due to volatility, both bears and bulls are likely to fail in 2023. In the same month, the expert called the easing of monetary policy by the US Federal Reserve a condition for the onset of a bull crypto market.