(Bloomberg) — Speculators cleaving to the view that the crypto rout is mostly over are at risk of a rude awakening in 2023, according to Standard Chartered.

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A further Bitcoin plunge of about 70% to $5,000 next year is among the “surprise” scenarios that markets may be “under-pricing,” the bank’s Global Head of Research Eric Robertsen wrote in a note on Sunday.

Demand could switch from Bitcoin as a digital version of gold to the real thing, spurring to a 30% rally in the yellow metal, Robertsen also said.

This possible outcome involves a reversal in interest-rate hikes as economies struggle and more crypto “bankruptcies and a collapse in investor confidence in digital assets,” Robertsen added.

He stressed that he wasn’t making predictions but instead adumbrating scenarios that are materially outside of current market consensus.

The question of just what lies ahead for digital assets has arguably never been harder to answer following the collapse of Sam Bankman-Fried’s FTX exchange and sister trading house Alameda Research. The tremors spreading from the blowup threaten to topple more crypto companies and buffet token prices.

For some, much of the bad news may already be reflected in a more than 60% plunge in Bitcoin and a gauge of the top 100 tokens over the past year.

“Our base case is that most forced selling is over, but investors might not be compensated for the market risk incurred in the immediate term,” Sean Farrell, head of digital asset strategy at Fundstrat, wrote in a note Friday.

Farrell pointed to ongoing uncertainty surrounding Digital Currency Group, parent company of embattled crypto brokerage Genesis. Creditors to Genesis are seeking options to try to keep the brokerage from falling into bankruptcy.

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Gold Outlook

Robertsen of Standard Chartered said the surprise market scenario of gold surging as crypto retreats could see the precious metal scale $2,250 an ounce.

“Gold will benefit going forward from the problems in crypto, with the sudden decline in confidence in the crypto ecosystem,” said Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney.

The crypto sector continues to retrench. For example, digital-asset exchange Bybit is planning to cut its workforce by 30%, the latest in a slew of layoffs to hit the industry.

More pain may lie ahead: some 94% of respondents to Bloomberg’s MLIV Pulse survey think that further blowups will follow the bankruptcy of FTX as years of easy credit give way to a tougher business and market environment.

Bitcoin for the moment is fairly steady. The largest virtual coin rose as much as 1.8% on Monday and was trading at a three-week high of about $17,340 as of 2:35 p.m. in Tokyo. Tokens such as Ether, Solana and Polkadot also gained.

For crypto market prices: CRYP; for top crypto news: TOP CRYPTO.

–With assistance from Sing Yee Ong.

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