Standard Chartered boosts 2024 bitcoin forecast to $120,000

  

             

                 On July 10th, Standard Chartered made an announcement regarding the future value of bitcoin. According to the bank, they predict that the price of bitcoin could reach $50,000 by the end of this year and $120,000 by the end of 2024. This revised forecast takes into consideration the recent surge in bitcoin's price and suggests that it may motivate bitcoin miners to hold onto a larger portion of the cryptocurrency supply. Standard Chartered had previously forecasted a value of $100,000 for bitcoin by the end of 2024, but now they believe there is an additional 20% potential upside to that estimate. As with any cryptocurrency prediction, it's important to remember that the market is highly volatile and influenced by various factors, so caution is advised when interpreting these forecasts.

                Geoff Kendrick, a top FX analyst at Standard Chartered, stated in a report that the increased profitability per bitcoin mined by miners enables them to sell fewer bitcoins while maintaining their cash inflows. This reduction in the net supply of bitcoins could potentially drive the prices of bitcoin higher.

            Since the beginning of the year, the price of bitcoin has experienced an 80% surge. However, its current value, slightly above $30,200, is still less than half of its peak price of $69,000 reached in November 2021.

            In 2022, the cryptocurrency sector suffered significant losses, with trillions of dollars being wiped out. This was primarily due to central banks raising interest rates and the collapse of several crypto firms, including the FTX exchange. Nonetheless, the rebound in the crypto market has been fueled by the collapse of various traditional-style banks this year.

            Standard Chartered's rationale for their predicted price rise for bitcoin is based on the behavior of miners. The bank suggests that as the value of bitcoin increases, miners will find it more profitable to sell fewer coins in order to cover their operational expenses, primarily electricity costs associated with running their powerful computers.

            Geoff Kendrick, the bank's FX analyst, estimated that currently, miners are selling 100% of the new bitcoins they generate each day, which amounts to around 900 coins globally. However, if the price of bitcoin reaches $50,000, it is expected that miners would likely reduce their selling activity to approximately 20-30% of their daily production.

            To put it into perspective, this reduction would mean that miners would only sell around 180-270 bitcoins per day, significantly lower than the current rate of 900. This shift in selling behavior among miners is anticipated to contribute to a potential decrease in the net supply of bitcoins in the market, which could further drive up the price.

            Over the course of a year, the aforementioned measures would result in a decrease in miner selling from 328,500 bitcoins to a range of 65,700-98,550 bitcoins. This would effectively reduce the net supply of BTC by approximately 250,000 bitcoins per year.

            Furthermore, in the coming months of April or May, the daily number of bitcoins available for mining is expected to halve. This reduction is a result of a built-in supply and issuance mechanism designed to gradually restrict the supply of Bitcoin, thereby maintaining its attractiveness.

            It is worth noting that during previous Bitcoin rallies, predictions of exceedingly high valuations have been frequently made. In November 2020, a Citi analyst suggested that Bitcoin could potentially reach as high as $318,000 by the end of 2022. However, it is important to acknowledge that the cryptocurrency closed the previous year with a decline of approximately 65%, ending at $16,500.

            It is crucial to exercise caution when considering such predictions, as the cryptocurrency market is highly volatile and subject to various factors that can significantly influence its value.