Standard Chartered boosts 2024 Bitcoin forecast to US$120,000
THE value of top cryptocurrency Bitcoin could reach US$50,000 this year and US$120,000 by the end of 2024 Standard Chartered said on Monday (Jul 10), predicting that the recent jump in its price could encourage Bitcoin “miners” to hoard more of the supply.
Standard Chartered published a US$100,000 end-2024 forecast for Bitcoin back in April on the view that the so-called “crypto winter” was over, but one of the bank’s top foreign exchange analysts, Geoff Kendrick, said there was now a 20 per cent “upside” to that call.
“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,” Kendrick said in a report.
Bitcoin’s price has leapt 80 per cent since the start of the year but its current level of just over US$30,200 is still less than half the US$69,000 peak back in November 2021.
Trillions of dollars were wiped from the crypto sector in 2022, as central banks hiked rates and a string of crypto firms, such as the FTX exchange, imploded. This year’s collapse of a number of traditional-style banks though has fed the rebound.
Standard Chartered said the rationale for its predicted price rise was that miners who mint the 900 new Bitcoins produced each day around the world would soon need to sell fewer to cover their costs – mostly electricity to power super-computers.
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Kendrick estimated that miners have recently been selling 100 per cent of their new coins. If the price hits US$50,000 though, they would probably only sell 20 per cent to 30 per cent.
“It 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 – a reduction in net BTC supply of roughly 250,000 Bitcoins a year.”
Next April or May, the total number of Bitcoins able to be mined each day is also set to halve due to an inbuilt supply and issuance mechanism that gradually limits supply to maintain its appeal.
Predictions of sky-high valuations have been commonplace during Bitcoin’s past rallies. A Citi analyst said in November 2020 that Bitcoin could climb as high as US$318,000 by the end of 2022. It closed last year down about 65 per cent at US$16,500. REUTERS
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