By the end of 2024, Bitcoin’s value might increase to as much as $100,000, according to a report released on Monday by Standard Chartered.
According to Standard Chartered analyst Geoff Kendrick in the note, the failure of Silicon Valley Bank and other mid-tier U.S. lenders has strengthened the argument for Bitcoin as a “decentralized, trustless, and scarce digital asset.”
In the research titled “Bitcoin — Pathway to the USD 100,000 level,” Kendrick stated that “we see the potential for Bitcoin (BTC) to reach the USD 100,000 level by end-2024, as we believe the much-touted “crypto winter” is finally over.”
According to Kendrick, “the current stress in the traditional banking sector is highly conducive to BTC outperformance – and validates the original premise for Bitcoin as a decentralized, trustless, and scarce digital asset.”
According to CoinGecko data as of 9:40 a.m. ET, the price of one bitcoin was $27,601.55.
According to Kendrick, bitcoin has profited from the struggles of Circle’s USD Coin and other so-called stablecoins that try to achieve a 1-to-1 peg to the US dollar.
Following the disclosure of SVB exposure by its issuer Circle, USDC lost its peg to the dollar. The coin has already recovered its $1 worth, but according to CoinGecko data, its total market value has decreased from more than $43 billion since March 10 when the bank was thrown into receivership by the US government to $30.7 billion.
The “pathway to the USD 100,000 level is becoming clearer,” Kendrick said, adding that this, along with a stability of risk assets and speculation that the Federal Reserve may moderate monetary tightening further, indicates that.
Bitcoin proponents contend that, during hard times, digital money is a valuable asset to diversify into. According to the hypothesis, since there are only 21 million bitcoins available, the price of bitcoin should rise as interest in alternative assets rises in order to counteract the impacts of rapid inflation.
Amidst a turbulent backdrop of multibillion-dollar failures like FTX and Terra and regulatory crackdowns, the cryptocurrency failed that test last year when it fell 65%, making it the second-worst year for Bitcoin ever.
However, more recently, the token has been rising, indicating a rebound might be imminent. Although it has dropped significantly since hitting $30,000 two weeks ago, Bitcoin has increased by 66% since the year began.
“The associated price jump – from below USD 20,000 before the SVB issues to above USD 30,000 – has dramatically increased the profitability of Bitcoin mining companies,” noted Kendrick.
Bitcoin miners are unpaid individuals who devote their computational resources to resolving difficult cryptographic puzzles in order to validate transactions and create new coins.
Kendrick noted that this would be a favorable development for the cryptocurrency as miners are a big driving force for the market given the scale of their holdings. “With the price of BTC now well above our USD 15,000 estimate of direct costs, miners are unlikely to sell many coins,” Kendrick added.
“As the FOMC approaches the conclusion of its tightening cycle, the overall macroeconomic environment for risky assets is also steadily improving. Despite the fact that BTC can do well when risky assets decline, correlations to the Nasdaq indicate that it should perform better if risky assets as a whole improve.
Outlook for Bitcoin’s price
Not just Standard Chartered anticipates a significant increase in the price of Bitcoin. Several cryptocurrency industry insiders predicted Bitcoin would reach a new all-time high in 2023 during a blockchain conference in Paris last month. An executive at the U.S.-based cryptocurrency exchange Gemini told CNBC $100,000 may be a possibility.
Several venture capitalists, investors, and analysts were questioned by CNBC last year about their predictions for the performance of digital currency in 2023. Tim Draper, the founder of Draper Associates and a well-known Bitcoin bull, expressed optimism that the cryptocurrency may reach $250,000 in a positive statement.
Ironically, Standard Chartered predicted in a list of market surprises for 2023 that Bitcoin may fall as low as $5,000.
Some cryptocurrency speculators are pointing to the impending so-called “halving” of Bitcoin, which will cut the payouts to miners by 50%, as a potential catalyst for another massive increase in the price of the coin.
