Standard Chartered has revised its optimistic forecasts for Bitcoin (BTC) in the coming years. In a recent analysis released on Monday, the British multinational bank predicts that Bitcoin could reach $50,000 in 2023 and potentially reach a high of $120,000 by the end of 2024.
The bank’s revised prediction follows its previous update from April, where it declared that the ‘crypto winter’ had ended and estimated that BTC would reach $100,000 by the end of 2024.
According to Standard Chartered, the recent surge in BTC price may incentivize Bitcoin miners to hold onto a greater portion of the supply. This would decrease the available amount for trading, thereby exerting positive pressure on the cryptocurrency’s price. Geoff Kendrick, Standard Chartered FX analyst, states that this adds a further 20% upside to the bank’s previous projection of $100,000 by 2024.
The profitability of mining BTC has increased, enabling miners to sell fewer coins while maintaining sufficient cash inflows. Consequently, miners are likely to accumulate their tokens, anticipating higher prices. Currently, the mining process generates 900 new Bitcoins daily. However, if the price reaches $50,000, miners may only need to sell 20-30% of their coins to cover costs, resulting in reduced daily net supply from 328,500 to a range of 65,700-98,550 Bitcoins.
Moreover, miners may be further motivated to hold onto their BTC as the Bitcoin halving is predicted to take place on April 16, 2024. This event halves the new supply of Bitcoin minted with each block, reducing the rate at which new tokens enter the market. After the halving, the block reward will decrease from 6.5 BTC to 3.25 BTC, resulting in the minting of 450 BTC daily. Historically, Bitcoin’s price has typically reached its bottom between 517 and 547 days prior to halving. This aligns with the recent market bottom on November 19.
Cryptollica provides a chart illustrating Bitcoin’s performance relative to the halving cycle. The chart displays an upward trend leading up to the halving, followed by a parabolic rise and subsequent rapid sell-off.
In summary, Standard Chartered’s analysis suggests a bullish outlook for Bitcoin, with projected prices of $50,000 in 2023 and $120,000 by the end of 2024. The increased profitability for miners and potential decrease in net supply, along with the upcoming Bitcoin halving, are cited as contributing factors to this optimistic prediction.
