The ostensible reason for this projection by Standard Chartered: Hoarding of bitcoin by miners.

Standard Chartered has forecasted that the value of the leading cryptocurrency, bitcoin, may reach $50,000 within this year and rise to $120,000 by the conclusion of 2024. The bank suggests that the recent surge in bitcoin’s price could incentivize miners to hold onto more of their supply.

Earlier this year, Standard Chartered predicted a bitcoin price of $100,000 by the end of 2024 but now sees a 20% potential increase in that estimate. According to Geoff Kendrick, one of the bank’s top analysts, the profitability of mining bitcoin has risen, allowing miners to sell a smaller portion of their newly mined coins, thereby reducing the overall supply and driving up prices. Another reason for the highly bullish projection is the banking sector crisis.

Although bitcoin’s price has soared by 80% since the beginning of the year, it remains below its peak of $69,000 in November 2021. Standard Chartered’s projection is based on the expectation that miners will need to sell fewer bitcoins to cover their expenses, primarily the cost of electricity for their computing power. (Reuters)

Kendrick estimates that if bitcoin’s price reaches $50,000, miners would likely sell only 20-30% of their new coins, a significant decrease from the current 100% selling rate. This reduction in supply would result in approximately 250,000 fewer bitcoins entering the market each year.

Additionally, the number of bitcoins available for mining each day is set to decrease in April or May, contributing to the limitation of supply and the appeal of bitcoin.

It is worth noting that ambitious price forecasts have been made during previous bitcoin rallies, such as a prediction by a Citi analyst in November 2020 that bitcoin could reach $318,000 by the end of 2022.

However, the cryptocurrency closed the year at $16,500, experiencing a decline of approximately 65%.

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Image by Satheesh Sankaran from Pixabay