Standard Chartered, a British multinational bank, has recently released a report predicting that the price of Bitcoin will reach $120,000 by the end of 2024, representing a threefold increase from its current value. The bank’s bullish outlook is based on the belief that miners will begin hoarding their coins, thereby limiting the supply available in the market and driving up prices.
As explained in the report, the profitability of Bitcoin mining has increased significantly in recent months due to the rising price of the cryptocurrency. With each block mined, miners are currently rewarded with 6.25 BTC, which is worth over $180,000 at current prices. This has enabled miners to sell fewer coins while maintaining cash inflows, which has led to a reduction in the net BTC supply and a potential bullish feedback loop.
According to one of Standard Chartered‘s top FX analysts, Geoff Kendrick, “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 estimates that if Bitcoin’s price rises to $50,000 by the end of the year, miners will reduce the amount of BTC they sell per day, which will reduce net BTC supply by roughly 250,000 Bitcoins a year.
The report suggests that miners’ behavior is likely to change as the price of Bitcoin continues to rise, with more miners opting to hold onto their coins rather than sell them immediately. Standard Chartered believes that this trend will accelerate in the coming years, leading to a decrease in available supply and a corresponding increase in prices. The report also notes that Bitcoin’s recent price surge has reversed the negative momentum that had been building since 2022, with miners now enjoying higher revenue than they did at the start of the year.
The bank’s prediction of a $120,000 Bitcoin price by the end of 2024 is more optimistic than some other forecasts, but it is not without precedent. In late 2017, Bitcoin’s price reached an all-time high of nearly $20,000 before crashing back down to around $3,000 in 2018. Many analysts believe that the current bull run is different, however, and that Bitcoin is poised for sustainable growth over the long term.
Standard Chartered’s report suggests that Bitcoin is likely to remain a volatile but potentially lucrative investment in the coming years, with a number of factors contributing to its price trajectory. While the exact future of cryptocurrency remains uncertain, the bank’s prediction of a $120,000 price point by the end of 2024 is certainly one to watch closely.
Source: CoinDesk
