Tim Draper predicts bitcoin will reach $250,000 next year despite FTX collapse: 'The dam is about to break'

Venture capitalist Tim Draper thinks bitcoin volition deed $250,000 a coin by the mediate of 2023, adjacent aft a bruising twelvemonth for the cryptocurrency marked by manufacture failures and sinking prices.

Draper antecedently predicted that bitcoin would apical $250,000 by the extremity of 2022, but successful aboriginal November, astatine the Web Summit tech league successful Lisbon, helium said it would instrumentality until June 2023 for this to materialize.

He reaffirmed this presumption Saturday erstwhile asked however helium felt astir his terms telephone pursuing the illness of FTX.

"I person extended my prediction by six months. $250k is inactive my number," Draper told CNBC via email.

Bitcoin would request to rally astir 1,400% from its existent terms of astir $17,000 for Draper's prediction to travel true. The cryptocurrency has plunged implicit 60% since the commencement of the year.

Digital currencies are successful the doldrums arsenic tighter monetary argumentation from the Fed and a concatenation absorption of bankruptcies astatine large manufacture firms including Terra, Celsius and FTX person enactment aggravated unit connected prices.

FTX's demise has besides worsened an already terrible liquidity situation successful the industry. Crypto speech Gemini and lender Genesis are among the firms said to beryllium impacted by the fallout from FTX's insolvency.

Last week, seasoned capitalist Mark Mobius told CNBC that bitcoin could clang to $10,000 adjacent year, a much than 40% plunge from existent prices. The co-founder of Mobius Capital Partners correctly called the driblet to $20,000 this year.

Nevertheless, Draper is convinced that bitcoin, the world's largest cryptocurrency, is acceptable to emergence successful the caller year.

"I expect a formation to prime and decentralized crypto similar bitcoin, and for immoderate of the weaker coins to go relics," helium told CNBC.

Draper, the laminitis of Draper Associates, is 1 of Silicon Valley's best-known investors. He made palmy bets connected tech companies including Tesla, Skype and Baidu.

In 2014, Draper purchased 29,656 bitcoins confiscated by U.S. Marshals from the Silk Road acheronian web marketplace for $18.7 million. That year, helium predicted the terms of bitcoin would spell to $10,000 successful 3 years. Bitcoin went connected to ascent adjacent to $20,000 successful 2017.

Some of Draper's different bets person soured, however. He invested successful Theranos, a wellness startup that falsely claimed it was capable to observe diseases with a fewer drops of blood. Elizabeth Holmes, Theranos' founder, has been sentenced to 11 years successful prison for fraud.

Draper's rationale for bitcoin's breakout adjacent twelvemonth is that determination remains a monolithic untapped demographic for bitcoin: women.

"My presumption is that, since women power 80% of retail spending and lone 1 successful 7 bitcoin wallets are presently held by women, the dam is astir to break," Draper said.

Crypto has long had a sex disparity problem. According to a survey conducted for CNBC and Acorns by Momentive, doubly arsenic galore men arsenic women put successful integer assets (16% of men vs. 7% of women).

"Retailers volition prevention astir 2% connected each acquisition made successful bitcoin vs dollars," Draper added. "Once retailers recognize that that 2% tin treble their profits, bitcoin volition beryllium ubiquitous."

Payment middlemen specified arsenic Visa and Mastercard presently complaint fees arsenic precocious arsenic 2% each clip recognition cardholders usage their paper to wage for something. Bitcoin offers a mode for radical to bypass the middlemen.

However, utilizing the integer coin for mundane spending is tough, since its terms is precise volatile and the coin is not wide accepted arsenic currency.

"When radical tin bargain their food, covering and structure each successful bitcoin, they volition person nary usage for centralized banking fiat dollars," Draper said.

"Management of fiat is centralized and erratic. When a person decides to walk $10 trillion, your dollars go worthy astir 82 cents. Then the Fed needs to rise rates to marque up for the spend, and those arbitrary centralized decisions make an inconsistent economy," helium added. Fiat currencies deduce their worthy from their issuing government, dissimilar cryptocurrencies.

Meanwhile, the adjacent alleged bitcoin halving — which cuts the bitcoin rewards to bitcoin miners — successful 2024 volition besides boost the cryptocurrency, according to Draper, arsenic it chokes the proviso implicit time. The full fig of bitcoins that volition ever beryllium mined is capped astatine 21 million.