July 13, 2023
By Anjali Kochhar
Standard Chartered, a leading global bank, has revised its bitcoin price prediction, anticipating a surge to $120,000 by the end of 2024. The bank’s analysts believe that the recent price increase in the cryptocurrency may incentivize bitcoin miners to retain more of their supply, thus impacting the overall market dynamics.
In April, Standard Chartered initially published a forecast of $100,000 for bitcoin’s value by the close of 2024. However, Geoff Kendrick, one of the bank’s top foreign exchange (FX) analysts, now projects an additional 20% “upside” to that estimation.
Kendrick explained that the improved profitability for bitcoin miners per unit mined would enable them to sell fewer bitcoins while maintaining sufficient cash inflows. As a result, this reduced supply of bitcoins in the market would exert upward pressure on prices.
Bitcoin’s price has already experienced an 80% surge since the beginning of this year. However, its current value, slightly above $30,200, remains less than half of its peak at $69,000 in November 2021.
The cryptocurrency market suffered substantial losses in 2022, as central banks raised interest rates and several crypto companies, including the FTX exchange, encountered difficulties. Nevertheless, the recent collapse of several traditional-style banks has contributed to the market’s recovery.
Standard Chartered’s rationale for the projected price increase lies in the expectation that miners, who create approximately 900 new bitcoins daily worldwide, will soon reduce their selling volumes to cover their expenses, primarily electricity costs required to power their supercomputers.
Kendrick estimated that miners have been selling 100% of their newly minted coins. However, if the price of bitcoin reaches $50,000, miners would likely only sell 20-30% of their production.
He elaborated, “It is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently.”
Over the course of a year, this change would result in a reduction of miner selling from 328,500 to a range of 65,700-98,550 bitcoins annually. This significant decrease in the net supply of bitcoins would further support price appreciation.
Additionally, in April or May, the daily issuance of new bitcoins is set to halve due to the cryptocurrency’s built-in supply mechanism. This mechanism gradually limits the available supply to sustain its appeal.
It is worth noting that predictions of lofty valuations during bitcoin’s previous rallies have been common. In November 2020, a Citi analyst forecasted that bitcoin could surge as high as $318,000 by the end of 2022. However, the cryptocurrency closed last year at approximately $16,500, marking a decline of around 65%.
Standard Chartered’s revised bitcoin forecast highlights the potential for a substantial price increase in the coming years, primarily driven by the strategic decisions of miners and the evolving dynamics of the cryptocurrency market.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.