Standard Chartered has predicted that the value of Bitcoin could reach US$50,000 this year and US$120,000 by the end of 2024. The recent surge in Bitcoin’s price is expected to incentivize miners to hoard more of the supply, leading to a reduced net supply and potential price increases.
LONDON, 10 July 2023 – Standard Chartered (STAN.L), a leading financial institution, has forecasted that the value of the top cryptocurrency, Bitcoin, could reach US$50,000 this year and US$120,000 by the end of 2024. The recent surge in Bitcoin’s price has incentivized miners to hoard more of the supply, resulting in a reduced net supply and potential price increases.
Standard Chartered previously published a forecast of US$100,000 for Bitcoin by the end of 2024 in April, suggesting a positive outlook on the cryptocurrency market. However, Geoff Kendrick, one of the bank’s top foreign exchange analysts, now believes there is an additional 20% upside potential to that prediction.
“Increased miner profitability per BTC (bitcoin) mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher,” said Kendrick in a report.
While Bitcoin has experienced an 80% price surge since the beginning of this year, its current level of just over US$30,200 is still significantly lower than its peak of US$69,000 in November 2021.
Standard Chartered’s projection is based on the expectation that miners, who generate approximately 900 new bitcoins daily worldwide, will need to sell fewer coins to cover their expenses, primarily electricity costs associated with powering supercomputers.
Kendrick estimates that miners have been selling 100% of their new coins, but if the price of Bitcoin reaches US$50,000, they would likely only sell 20-30% of their inventory.
“This is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently. Over a year, that would reduce miner selling from 328,500 to a range of 65,700-98,550, resulting in a net reduction in BTC supply of approximately 250,000 bitcoins per year.”
Additionally, in April or May of the following year, the daily number of bitcoins available for mining will be halved due to the inherent supply and issuance mechanism that gradually restricts supply to maintain its appeal.
While predictions of high valuations have been made during Bitcoin’s previous rallies, Standard Chartered’s analysis provides a positive outlook for the cryptocurrency, considering factors such as miner behavior and supply dynamics.