The top cryptocurrency, bitcoin, could reach $50,000 this year and $120,000 by the end of 2024, according to a new forecast from Standard Chartered. The global bank said the jump in its price could encourage Bitcoin miners to hoard more of the supply.
The bank first published a $100,000 end-2024 forecast for Bitcoin in April on the view that the so-called “crypto winter” was over. Geoff Kendrick, one of the bank’s top foreign exchange (FX) analysts, said on Monday there was a 20% “upside” to that call.
In a research note, the bank cited several drivers that could see Bitcoin rise to the magical figure. These included a rebound in the banking sector, stabilizing risk assets as the Federal Reserve nears the end of its rate-hiking cycle, and improved profitability for bitcoin miners.
The latter is critical, as mining rewards, minted every time a block of bitcoin is found and broadcasted to the network, drop in 2024 due to a reduction in the emission rate. Kendrick believes this will drive miners to hold on to more of the bitcoin they produce, helping to push prices higher.
He also expects the broader market to improve, a factor that would give Bitcoin a tailwind and boost its share of the overall crypto market. The currency accounts for around 47% of the market, down from about 40% in mid-March amid the selloff in equities and other risky assets.
However, Standard Chartered’s research note says that Bitcoin may benefit even more from its status as a branded haven and remittance tool, along with a favorable regulatory backdrop in many jurisdictions. In particular, the European Parliament’s recent endorsement of a first set of rules to regulate digital asset markets will likely boost investor confidence.
Adding to the bullish case is that the U.K.-based multinational bank is already active in the space, with its crypto custody platform Zodia raising $36 million in a Series A funding round in April. In addition, it has partnered with US exchange Coinbase to launch trading in Singapore.
The bank’s bullish forecast also comes ahead of next spring’s halving, which happens every four years and reduces mining rewards to 3.125 BTC per block. Historically, such events have acted as a catalyst for solid Bitcoin rallies.
As such, investors should consider the potential for a correction as the market adjusts to the latest development. But the longer-term outlook is still bullish as long as underlying conditions improve. The bank will publish a complete update of its forecast in July.
