On Monday, Britain’s multinational bank Standard Chartered (STAN.L) made a noteworthy announcement regarding the future price of Bitcoin. According to their analysis, the price of Bitcoin has the potential to surge $50,000 within this year, and could further rise to an impressive $120,000 by the end of 2024.
Standard Chartered believes that the recent surge in Bitcoin’s price has reportedly encouraged “miners” to retain a larger portion of the cryptocurrency’s supply, thereby contributing to its upward trajectory.
Back in April, Standard Chartered released a forecast stating that Bitcoin could reach $100,000 by the end of 2024, indicating their belief that the “crypto winter” had come to an end. However, Geoff Kendrick, one of the bank’s prominent foreign exchange analysts, has now suggested that there is a 20% potential for further upward movement in their prediction.
According to a statement made by Kendrick, the increased profitability per BTC mined allows miners to sell fewer coins while still maintaining their cash inflows. Thus reduction in the net BTC supply contributes to driving BTC prices higher.
Since the beginning of the year, Bitcoin’s price has surged by 80%. However, its current value of slightly above $30,200 remains less than half of its peak at $69,000 reached in November 2021.
The crypto sector suffered significant losses amounting to trillions of dollars in 2022 due to the actions of the central bank, which raised interest rates, and the collapse of various crypto firms, including the FTX exchange. Nevertheless, the recent downfall of several traditional-style banks has played a role in the industry’s rebound.
Based on Kendrick’s calculations, it is currently observed that miners are selling all of their newly mined coins to cover their expenses. However, if the price of Bitcoin reaches $50,000 by the year-end, it is anticipated that the proportion of coins sold by miners could decrease significantly to a range of 20-30%. This reduction in the number of coins entering circulation would lead to a decrease in the overall supply of Bitcoin, potentially generating a positive feedback loop that favors bullish market sentiments.
“It is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently,” Kendricks stated. “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.”
