2023 proved to be quite the whirlwind as far as the global economy goes. From bullish crypto projections that failed to materialize to misplaced predictions about market downturns and recessions that never happened, Cointelegraph looks at the year’s most notable financial forecast flubs.
Sell your crypto, advises CNBC’s Jim Cramer
Bitcoin (BTC) went on a tear over the course of 2023, as highlighted by the fact that between October and December alone, the digital asset’s value surged from $26,700 to approximately $44,000, showcasing a price increase of 64.7%.
However, around the end of 2022 — when Bitcoin was trading for just $16,800 — American television personality and host of CNBC’s Mad Money Jim Cramer told viewers to liquidate all of their cryptocurrency holdings, particularly BTC, regardless of their losses. He said it’s “never too late to sell an awful position.” However, since doling out this advice, Bitcoin’s value has surged by over 150%.
Over the last couple of years, Cramer’s fluctuating stance toward cryptocurrency and tendency to offer ill-timed advice has become a source of amusement within investment circles. His knack for making misjudged calls at crucial moments has not gone unnoticed. For instance, back in August 2022, a cryptocurrency trader reported doubling their portfolio by taking positions contrary to Cramer’s suggestions.
Officially doubled the inverse @jimcramer account, for those who are not aware i started the account with 50k
— Algod(τ, τ) (@AlgodTrading) August 22, 2022
honestly mind blowing how wrong one man can be pic.twitter.com/mH3DhEdJFs
In October 2022, an investment fund sought to establish the Inverse Cramer ETF, an exchange-traded fund endorsing assets that are opposite to those endorsed by Cramer.
Bitboy: Litecoin will surge by to $500 by year-end
On May 23, Ben Armstrong (popularly known as Bitboy) and his team anticipated a significant surge in Litecoin’s (LTC) value, rooted in their analysis of the coin’s total market capitalization and supply. They predicted the digital asset would reach a price point of $500 to $540 during the next bull market, alluding to the fact that despite LTC not being a primary investment vehicle for most newcomers, it continues to be a huge draw among veteran crypto investors.
However, the reality of Litecoin’s market performance tells a different story. Starting the year at $69.69, the currency ended 2023 at around $73, despite the asset experiencing a peak during the first week of July, when it reached $113.
Wall Street experts: 2023 will be mired in recession
A chorus of major Wall Street banks and honchos spent 2023 making gloomy predictions about the global economy.
For example, in July, Joseph LaVorgna, chief economist at SMBC Nikko Securities America, predicted that the second half of 2023 would be engulfed by a recession — citing two consecutive quarters of negative growth to start last year and the Federal Reserve’s ongoing rate-hiking campaign as reasons. Other risk factors cited included low confidence readings from small businesses and a manufacturing contraction.
Despite these ominous forewarnings, there is still no major recession in play, even though the macroeconomic landscape at large continues to remain uncertain.
Tim Draper: Bitcoin will trade for $250,000
American venture capital investor and Bitcoin enthusiast Tim Draper forecasted in late 2022 that BTC would reach $250,000 in 2023, attributing his optimism to the potential increase in female involvement in the market. “My assumption is that since women control 80% of retail spending, and only 1 in 7 Bitcoin wallets are currently held by women that the dam is about to break,” Draper told CNBC.
Bitcoin will plummet to $5,000
Around the same time that Draper made his bullish proclamation, banking giant Standard Chartered projected a bleak future for Bitcoin, suggesting it might plummet as low as $5,000 sometime during 2023.
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Eric Robertsen, the bank’s global head of research, envisioned a nightmarish situation where declining yields and technology stocks contributed to a slowdown in Bitcoin’s sell-off, but not before causing significant damage. He also anticipated further bankruptcies and a collapse in investor confidence in digital assets due to liquidity shortages in more crypto firms and exchanges.
Cramer strikes again, advises to buy Silicon Valley Bank shares
Another zinger from Cramer, who was featured earlier in this list, came during the Feb. 8 broadcast of Mad Money when he discussed the now-defunct Silicon Valley Bank (SVB) and its “amazing future prospects.”
The former hedge fund manager emphasized that Wall Street’s concerns about the regional bank’s deposit base were overstated, citing the institution’s low dependence on private equity and venture capital offerings as being reasons for its stock being severely undervalued.
However, exactly a month later, on March 8, the issues facing Silicon Valley Bank became public. The bank announced the sale of a large portion of its securities at a loss and its intention to issue over $2 billion in new shares to strengthen its balance sheet. The news led to a steep decline in the bank’s stock and triggered a rush among depositors to withdraw their funds.
As the situation escalated and the bank’s stock price further declined, a trading halt on all SVB products was initiated, with even the Federal Deposit Insurance Corporation intervening.
Michael Gayed predicts major stock market crash
Michael Gayed, a prominent portfolio manager at Toroso Investments, noted several times over the course of 2023 that the stock market was simmering in a financial bubble that was due to correct in a big way by the end of the year.
He said: “This isn’t some fearmongering or click bait. This is about scenario analysis and considering all possibilities. There is precedent for a stock market crash to hit toward the end of October. All this, from a path perspective, is oddly consistent. [...] Hell, maybe it happens in early November instead to really throw everyone off.”
Gayed further proclaimed that every potent financial indicator he considered heavily favored a major market slump and that to deny the imminent possibility of a market meltdown was “beyond naïve.”
USDC will flip USDT, and Ether will outperform Bitcoin
As part of The Block’s crypto outlook series released at the start of 2023, The Block’s research director, Eden Au, predicted that USD Coin (USDC) would overtake Tether (USDT) to become the world’s most dominant stablecoin by market capitalization, citing a shift in the European Union’s progression toward finalizing its Markets in Crypto-Assets legislation as a reason for the same. However, as of Dec. 28, USDT’s market cap stood at $91.6 billion, whereas USDC’s volume lay at just under $25 billion.
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Additionally, in the same report, The Block CEO Larry Cermak projected Ether (ETH) to outperform Bitcoin by the end of the year. This prediction also missed the mark, with BTC’s annual profit margin sitting at 160% as compared with ETH’s 99%.
NFTs will dominate the crypto market
At the end of 2022, Jamie Burke, CEO and founder of Outlier Ventures — one of the world’s largest Web3 accelerators — predicted that the nonfungible token (NFT) market was in for an extremely strong 2023, adding: “Throughout the past year, we were already beginning to see major NFT investments from major Web2 brands [Starbucks and Disney] and across Web3. […] This shows no sign of stopping in 2023. Brands will continue to flock to NFTs.”
However, the reality of 2023 showed a different trend, with a notable decline being witnessed across the NFT sector. For starters, the number of active wallets engaged in NFT trading dropped by over 25% from Q2 to Q3. Moreover, monthly NFT sales also decreased steadily throughout the year, with only a few projects, like CryptoPunks and Bored Ape Yacht Club, performing relatively well.
