Bitcoin, the world’s most popular cryptocurrency, has been the subject of much speculation and analysis. On Monday, Standard Chartered, the multinational bank based in Britain, made a noteworthy announcement regarding the future price of Bitcoin. According to their analysis, the price of Bitcoin has the potential to surge to $50,000 within this year, and could further rise to an impressive $120,000 by the end of 2024.
The Influence of Miners on Bitcoin’s Price
Standard Chartered believes that the recent surge in Bitcoin’s price has encouraged “miners” to retain a larger portion of the cryptocurrency’s supply, thereby contributing to its upward trajectory. This observation is based on the increased profitability per BTC mined, which allows miners to sell fewer coins while still maintaining their cash inflows. Consequently, the reduction in the net BTC supply contributes to driving BTC prices higher.
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.
Bitcoin’s Recent Performance
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.
The Impact of Miners Selling Behavior
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,” Kendrick 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.”
Conclusion
Standard Chartered’s analysis and prediction regarding the future price of Bitcoin offer an interesting perspective on the cryptocurrency market. With the potential for Bitcoin to reach $120,000 by 2024, the industry is poised for significant growth and potentially higher investor interest. However, it is important to note that the cryptocurrency market is highly volatile, and predictions are subject to various factors and market conditions.
FAQs
1. How did Standard Chartered determine the future price of Bitcoin? Standard Chartered conducted analysis based on various factors, including the behavior of miners and the current market conditions, to predict the future price of Bitcoin.
2. What is the significance of miners in the Bitcoin market? Miners play a crucial role in maintaining the Bitcoin network by validating transactions and adding them to the blockchain. Their behavior, such as selling or retaining coins, can influence the overall supply and price of Bitcoin.
3. What is the “crypto winter” mentioned in the article? The “crypto winter” refers to a period of significant decline and bearish market sentiment in the cryptocurrency market. It is often characterized by a prolonged decrease in prices and a lack of investor confidence.
4. Why did the crypto sector suffer losses in 2022? The crypto sector experienced significant losses in 2022 due to actions taken by central banks, such as raising interest rates, and the collapse of various crypto firms.
5. Should investors consider Standard Chartered’s prediction as financial advice? Standard Chartered’s prediction should be considered as an analysis and perspective on the market rather than financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.
