Mega Bank Predicts Supply Shock Will Send Bitcoin to $120,000 by End of Next Year.

In a recent announcement, Standard Chartered released a report that predicts Bitcoin will surge to $50,000 later this year, and even reach a whopping $120,000 by the end of 2024. They claim this new forecast comes as the recent price surge of Bitcoin has encouraged "miners" to hold onto more of the digital currency.

Back in April, Standard Chartered published a prediction of $100,000 for Bitcoin's value by the end of 2024, indicating a 20% upside to that estimate. Geoff Kendrick, one of the bank's top foreign exchange analysts, stated that the increased profitability for miners per Bitcoin mined would lead to reduced selling and higher prices. Kendrick explained, "Increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher."

Although Bitcoin has already experienced an 80% increase in price since the beginning of this year, it is currently valued at just over $30,200, which is less than half of its peak value of $69,000 in November 2021.

The crypto sector faced significant losses in 2022 due to rising interest rates by central banks and the collapse of various cryptocurrency firms, including the FTX exchange. However, the recent collapse of several traditional-style banks has contributed to the market's rebound.

Standard Chartered's rationale for the projected price rise is based on the expectation that miners, who produce approximately 900 new bitcoins globally each day, will soon need to sell fewer coins to cover their expenses, particularly electricity costs for operating their supercomputers. Currently, miners are estimated to sell 100% of their newly minted coins. However, if the price reaches $50,000, they would likely reduce their selling to only 20-30% of their output.

Analyst Geoff Kendrick explained, "It is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently." This reduction in daily sales would result in a decrease in net Bitcoin supply by approximately 250,000 bitcoins annually, down from the current figure of 328,500.

Furthermore, in April or May of the upcoming year, the total number of bitcoins available for mining each day is expected to halve due to a built-in supply and issuance mechanism, which gradually limits the supply to maintain its appeal.

It is worth noting that lofty predictions for Bitcoin's value have been common during past rallies. For example, in November 2020, a Citi analyst suggested that Bitcoin could potentially reach as high as $318,000 by the end of 2022. However, the cryptocurrency closed the year at around $16,500, representing a decline of approximately 65%.

With the cryptocurrency market continually evolving, it will be interesting to see how Bitcoin's value progresses and whether Standard Chartered's predictions prove accurate. Stay tuned for further updates on this exciting topic.

Standard Chartered Track Record

However, it is important to approach Standard Chartered's latest forecast for Bitcoin with caution, considering their track record of inaccuracies in the past. Last year, the bank forecasted that the BTC price would plummet to as low as $5,000, a prediction that turned out to be significantly off the mark.

The fact that Standard Chartered now believes BTC will end the year ten times higher than their previous forecast raises questions about the accuracy and reliability of their predictions. It is worth noting that making accurate forecasts for the highly volatile cryptocurrency market is a challenging task, and even the most seasoned experts can be wrong. How does one go from predicting a crash to 5K, then surge to 50K, then to 120K, all in the span of under a year. To me, it sounds like nothing more than clickbait.

It is important for investors and market participants to exercise their own judgment and conduct thorough research before making investment decisions. Relying solely on the predictions of financial institutions, especially considering their past inaccuracies, may not always lead to the desired outcomes. Additionally, we already know Standard Chartered's has their own crypto custody platform Zodia, which could be a conflict of interest as the bank tries to lure in more investors.

Many claim that the recent surge in Wall Street's interest in Bitcoin is a positive development, viewing it as a sign of mainstream acceptance and the maturation of the cryptocurrency market.

However, others argue that caution is warranted. When reflecting on Wall Street's track record, there have been instances where its interests have not aligned with the general public's well-being. One notable example is the 2008 financial crisis, where reckless behavior and unethical practices by some Wall Street firms led to severe economic consequences for millions of people. They were urging people to buy into high-risk mortgage backed securities, while many of the banks were secretly shorting it behind the scenes.

Who remembers when Citi bank said in November 2020 that bitcoin could climb as high as $318,000 by the end of 2022, yet it plunged into a brutal bear market and closed last year down about 65% at $16,500… Ouch.

With that in mind, we would love to hear your thoughts on this matter.

What do you make of Standard Chartered's belief that Bitcoin will reach $50,000 in 2023 and hit $120,000 by the end of the following year? Do you think their analysis of supply dynamics holds merit? Or do you have reservations about their accuracy based on their previous forecasts? Share your insights and opinions with us—we value your perspective!