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Bitcoin has seen a positive trend over the past few weeks after dropping to a new all-time low last year due to the crypto winter that wiped billions of dollars from the industry.
Standard Chartered Bank is doubling down on its Bitcoin (BTC) predictions, suggesting that the leading crypto asset has the potential to soar to $120,000 by the end of 2024.
After months of predicting that the crypto asset could reach $100,000 by the end of this year and $120,000 in 2024, the company’s analyst, Geoff Kendrick, said the bank had reiterated its bold forecast, according to reports citing an email sent to an undisclosed insider.
“We are reiterating our BTC year-end price target of around $100,000, with the potential for an increase due to decreasing miner sales,” Kendrick said in the email.
Standard Chartered Analyst on Bitcoin’s Rollercoaster Journey
Kendrick initially predicted in April that BTC’s value could reach $100,000 by the end of the year due to various factors, including the collapse of banks in the United States, with many financial companies, including Signature Bank, facing turbulence.
Later in July, the British bank retraced its forecast, noting that BTC no longer had the potential to reach such a level. Instead, the company said the crypto asset might retrace its steps to $50,000 by the end of 2023 but could soar to an all-time high of $120,000 by next year.
At the time, Standard Chartered cited reasons such as increased miner profitability as one of the factors that would drive the price to a new height in 2024. The bank has maintained its bullish stance, reiterating that the crypto asset could reach the predicted levels.
The company’s analyst explained that a $120,000 price tag is valid and represents an almost 300% increase from current levels. Additionally, the British bank anticipates a 67% surge in BTC prices this year, setting the stage for the predicted $50,000 mark.
According to Kendrick, the potential price surge could be attributed to a surge in mining profitability. As mining becomes more lucrative, miners can afford to sell fewer tokens while maintaining a consistent cash flow. This reduction in the supply of BTC acts as a catalyst for price appreciation.
Strategic Mining and Potential Supply Reduction
Kendrick also predicts that miners will have sold all their BTC holdings by the second quarter of next year, but he foresees a gradual reduction in sales over time, propelling the Bitcoin price to the moon. Historically, this pattern emerges when the price of Bitcoin surpasses the average total cash cost of mining.
“If the BTC price reaches $50,000 in the first quarter of 2024, as we predict, the ‘BTC less all cash costs’ calculation will rise to $30,000,” Kendrick explained.
He highlighted that selling only 27% of the BTC mined in the first quarter of 2024 could generate the same excess cash as selling 100% in the second quarter of 2023. The bank’s analyst said that this strategic approach could reduce Bitcoin’s net supply by approximately 250,000, not only impacting prices but also influencing the inflation rate, potentially dropping it from an annual basis of 1.7% to 0.4%.
Potential ETF Approval Could Boost Bitcoin Price
Bitcoin has seen a positive trend over the past few weeks after dropping to a new all-time low last year due to the crypto winter that wiped billions of dollars from the industry. Interest in the crypto asset has regained momentum as many financial services companies in the United States have filed with the country’s Securities and Exchange Commission (SEC) to offer BTC spot exchange-traded funds to their customers.
According to reports, the potential approval and introduction of the first spot BTC-related ETF to the traditional stock exchanges in the country can bolster the mainstream adoption of the crypto asset and drive its value to the moon.
This positive momentum has contributed to various bullish calls for the crypto asset, with Tom Lee from Fundstrat recently forecasting that Bitcoin could reach $200,000 within the next few years.