Standard Chartered just revised its forecast for Bitcoin, projecting that it could surge to $120,000 by the end of 2024. This represents a significant increase from the bank’s initial prediction of $100,000 in April. The financial institution’s updated forecast is driven by the recent upward momentum in BTC’s price, which has already witnessed an 80% surge since the beginning of this year. The bank’s analysts believe that this surge could incentivize Bitcoin mining firms to hold onto their supply, consequently reducing the overall BTC supply in the market.
Rising Value and Miner Incentives
According to Reuters, Standard Chartered’s revised prediction is underpinned by the notion that Bitcoin miners, who generate approximately 900 new Bitcoins each day, will soon find it more profitable to retain a larger portion of their newly minted coins rather than immediately selling them. The profitability per Bitcoin mined has increased, allowing miners to maintain cash inflows with reduced selling volumes.
This move would eventually lead to a decrease in the net BTC supply, subsequently driving the price of Bitcoin higher.
Bitcoin’s Recent History
Bitcoin’s value has experienced significant volatility in recent years. After reaching its all-time high of $69,000 in November 2021, the cryptocurrency saw a substantial decline as the crypto sector faced challenges in 2022.
Factors such as central banks raising interest rates and the collapse of several traditional-style banks contributed to a massive sell-off, resulting in the loss of trillions of dollars from the crypto sector. However, this year has seen a remarkable rebound, fueled in part by the aforementioned increased profitability for Bitcoin miners.
A Change in Sales Strategy of Bitcoin Miners
Standard Chartered analyst Geoff Kendrick believes that miners have historically been selling 100% of their newly minted coins. However, if Bitcoin’s price were to reach $50,000, miners would likely reduce their selling volume to only 20-30% of their daily production.
This shift in strategy would lead to a substantial decrease in the overall net BTC supply, estimated to be around 250,000 bitcoins per year. Such a reduction in supply could further drive the price of Bitcoin upwards.
Halving Supply and Market Predictions
In addition to the changing miner sales strategy, the supply and issuance mechanism inherent in Bitcoin will also play a role in its future value. By next April or May, the daily number of Bitcoins available for mining is set to halve.
This gradual reduction in supply is intended to maintain the cryptocurrency’s scarcity and appeal to investors. While it is important to note that predictions of sky-high valuations have been made during previous Bitcoin rallies, Standard Chartered’s forecast offers a positive outlook for the market.
Final Thoughts on the Bitcoin Prediction of Standard Chartered
Standard Chartered’s revised Bitcoin forecast of $120,000 by the end of 2024 indicates the bank’s confidence in the cryptocurrency’s potential for substantial growth. With the recent surge in Bitcoin’s price and the changing sales strategy of miners, the reduced net BTC supply could act as a driving force for future price increases.
While past predictions have not always materialized, the inherent scarcity of Bitcoin and its increasing adoption provide a foundation for optimism. It remains to be seen how the market will evolve, but for now, Bitcoin enthusiasts can look forward to the potential of reaching new price milestones.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.