According to Standard Chartered, Bitcoin will rise to $120,000 by the end of 2024 – but one expert says it’s a number ‘plucked out of thin air’
- The bank predicts that bitcoin could reach $50,000 by the end of the year
- Standard Chartered said the earlier $100,000 forecast was too conservative
- Bitcoin miner profitability has ticked higher this year, leading to new forecasts
Standard Chartered has predicted that bitcoin will trade up to $120,000 (£93,000) by the end of 2024, as the bank re-evaluated a previous forecast as “too conservative”.
Having previously predicted a peak of $100,000 in 2024, the London-listed bank now thinks bitcoin could reach $50,000 by the end of this year as cyrptocurrency miner profits continue to grow.
Bitcoin is up 80.5 percent against dollars this year to $29,965, and 69 percent against British pounds to £23,200.
Standard Chartered Bank predicts that Bitcoin could reach $50,000 by the end of the year and reach $120,000 by the end of 2024
Bitcoin mining is the process of making transactions when new bitcoins enter circulation in a blockchain.
The purpose of mining is to validate transactions to prevent fraud and add new blocks to the blockchain ledger.
Bitcoin mining involves using a powerful computer to solve complex hash puzzles and in turn, the first user to solve the puzzle is rewarded with bitcoins.
Standard Chartered said, “Based on their profitability, miners decide how much of the new BTC supply… reaches the market.
“Increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, reducing net BTC supply and increasing BTC prices.”
The 12 largest publicly traded miners sold 106 percent of newly mined bitcoin in the first quarter of this year, with the figure rising above 100 percent due to inventories, the bank said.
Standard Chartered expects this figure to fall “slightly below” 100 percent for the second quarter, but a $50,000 bitcoin price would push it down to 20 to 30 percent.
It said: ‘That’s a net annual sales reduction of BTC 250,000 – a large number relative to the bitcoin market’s turnover.
“We previously predicted that this driver would add $10,000 to the bitcoin price; we now think this estimate is too conservative, and so we see an increase to our end-2024 target of approximately $120,000.”
However, not all investors are as confident as Standard Chartered about bitcoin’s trajectory.
Crypto expert Glen Goodman told This is Money that the bank’s $120,000 forecast “feels like a number plucked from thin air.”
Goodman said, “Standard Chartered has put out a solid bullish case, but there are some key red flags for bitcoin that we can’t ignore.
US financial regulators pound crypto relentlessly with lawsuits and investigations.
“Unless they change their minds, doing crypto business in the richest country in the world will become increasingly difficult.
Many economists also expect a recession next year, which could seriously depress asset markets, including stocks and bitcoin.
But if a recession encourages central bankers to cut interest rates, that could ultimately boost stocks and bitcoin.
“The bottom line is that bitcoin is at the mercy of future events. Some, such as the 2024 halving, are known, others, such as a possible recession, are unknown. So $120,000 feels like an out of the blue number.”