Standard Chartered boosts its 2024 bitcoin forecast to $120,000, citing increased miner profitability and reduced supply as key factors.
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Standard Chartered Bitcoin Forecast
In a recent report, Standard Chartered has raised its 2024 bitcoin forecast to an impressive $120,000. This revision comes after the bank’s initial prediction of $100,000 made in April, signaling a 20% increase in their bullish outlook.
Geoff Kendrick, one of the bank’s top FX analysts, attributes this upward revision to increased miner profitability and a subsequent reduction in net bitcoin supply.
Let’s delve into the details of Standard Chartered’s revised forecast and the factors driving this optimistic projection.
Bitcoin’s Price Surge and the Crypto Winter
Bitcoin’s price has experienced significant volatility over the past year. Starting the year at a modest level, it has since surged by 80%.
However, despite this remarkable growth, its current price of just over $30,200 remains below half of its peak value of $69,000 recorded in November 2021.
This volatility and downturn in price were largely attributed to the “crypto winter” experienced in 2022, where trillions of dollars were wiped from the crypto sector due to central bank rate hikes and the collapse of several crypto firms.
Mining Profitability and Reduced Bitcoin Supply
Standard Chartered’s revised forecast is based on the premise that increased miner profitability per bitcoin mined will result in a reduction in net bitcoin supply and subsequently drive prices higher.
Geoff Kendrick explains that miners will be able to sell fewer bitcoins while maintaining cash inflows, thanks to their increased profitability.
This reduction in selling pressure will create a supply shortage, pushing bitcoin prices upward.
Miners Adjusting Selling Behavior
According to Kendrick’s report, miners have been selling 100% of their new coins in recent times. However, if bitcoin’s price reaches $50,000, they would likely reduce their selling behavior to around 20-30% of the newly minted coins.
This shift in strategy translates to a significant reduction in net bitcoin supply. Instead of the current daily selling of 900 bitcoins, miners would only sell a range of 180-270 per day, resulting in a net BTC supply reduction of approximately 250,000 bitcoins per year.
Bitcoin Mining Supply Halving
Another factor that supports Standard Chartered’s optimistic forecast is the upcoming halving of the total number of bitcoins that can be mined each day.
Bitcoin’s supply and issuance mechanism is designed to gradually limit supply, maintaining its appeal and scarcity. By next April or May, the number of new bitcoins entering circulation daily will be halved.
This mechanism further contributes to the projected reduction in bitcoin supply and, consequently, its potential for increased value.
Historical Predictions and Future Outlook
It’s worth noting that ambitious predictions for bitcoin’s valuation are not uncommon during its past rallies. In November 2020, a Citi analyst projected that bitcoin may also attain as excessive as $318,000 via way of means of the cease of 2022.
However, the cryptocurrency completed the year at $16,500, seeing a fall of about 65%. While history teaches us to approach forecasts with caution,
Standard Chartered’s revised projection provides a glimpse of the positive sentiment surrounding bitcoin’s future.
Conclusion
Standard Chartered’s decision to boost its 2024 bitcoin forecast to $120,000 demonstrates the bank’s confidence in the cryptocurrency’s potential. Factors such as increased miner profitability, reduced bitcoin supply, and the upcoming halving mechanism contribute to this optimistic outlook.
While bitcoin’s price has experienced volatility in the past, Standard Chartered’s revised projection provides hope for bitcoin enthusiasts and investors, signaling a potential upward trajectory in the future.
As always, it is advisable to approach price forecasts with caution and conduct thorough research before making any investment decisions.
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FAQs
What is Standard Chartered’s revised bitcoin forecast for 2024?
Standard Chartered has raised its 2024 bitcoin forecast to $120,000, representing a 20% increase from its previous prediction of $100,000.
What factors contribute to Standard Chartered’s revised forecast?
Increased miner profitability and a subsequent reduction in net bitcoin supply are the key factors driving Standard Chartered’s bullish outlook.
How does increased miner profitability affect bitcoin prices?
Increased miner profitability allows miners to sell fewer bitcoins while maintaining cash inflows. This reduced selling pressure creates a supply shortage and drives bitcoin prices higher.
How will miners adjust their selling behavior?
If bitcoin’s price reaches $50,000, miners are expected to reduce their selling behavior to around 20-30% of newly minted coins, resulting in a significant reduction in net bitcoin supply.
What impact will the halving of bitcoin mining supply have?
By next April or May, the total number of new bitcoins mined each day will be halved. This gradual reduction in supply further contributes to the projected increase in bitcoin’s value.
Should we be cautious about bitcoin price forecasts?
While ambitious predictions have been made in the past, it is important to approach forecasts with caution. However, Standard Chartered’s revised projection reflects positive sentiment towards bitcoin’s future.
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