Standard Chartered has raised its bullish Bitcoin (BTC-USD) outlook and now expects BTC to reach $120,000 by the end of 2024, up from the previous prediction of $100,000, citing improved miner profitability. Further, the bank expects BTC to reach $50,000 by the end of 2023, reflecting an expected increase of about 65% from current levels.
Standard Chartered Bullish on Bitcoin
Standard Chartered thinks that its previous prediction, issued in April, of $100,000 (based on the bank’s belief that the crypto winter is over) seems “too conservative.”
Geoff Kendrick, head of Forex and digital assets research at Standard Chartered explained, “Increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher.”
Kendrick further noted that at recent prices, miners have been selling 100% new Bitcoin. He expects miners to sell 20% to 30% at $50,000. Essentially, when Bitcoin prices are rising, miners can cover their costs by selling fewer Bitcoin and holding more in anticipation of higher prices in the future.
Further, Bitcoin supply is expected to be under pressure in 2024 due to “halving,” a programmed event that will cut down the supply of Bitcoin rewards to the miners to 450 from 900 per day. Such an exercise occurs every four years to ensure that Bitcoin is below its limit of 21 million tokens.
Bitcoin has rallied over 83% since the start of 2023 and is trading above $30,400 as of writing. Recently, the largest cryptocurrency by market cap benefited from a spree of filings for a spot Bitcoin exchange traded fund (ETF) in the U.S. by several firms, including BlackRock (NYSE:BLK).
While upbeat Bitcoin predictions seem exciting, investors should be aware of the high volatility and risks associated with Bitcoin and the crypto market in general. High interest rates and the FTX debacle wiped out about 65% of Bitcoin’s value in 2022. BTC-USD is still trading below its record high of over $68,000, seen in November 2021.
