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Standard Chartered has raised its 2024 Bitcoin forecast to $120,000, a notable increase from the $100,000 prediction made in April, according to a Reuters report. The United Kingdom-based financial institution suggested that an anticipated surge in Bitcoin’s price that could inspire miners to retain a larger portion of the digital asset.
Geoff Kendrick, a top FX analyst at the bank, anticipates a 20% upside potential to the initial prediction. He points to increased mining profitability as the catalyst for this adjustment:
“Increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher.”
Despite a remarkable 80% price surge since the beginning of the year, Bitcoin is currently trading at just above $30,200, markedly less than its historic high of $69,000 set in November 2021, according to CoinGecko.
Standard Chartered suggests that the proposed increase is largely due to miners needing to sell fewer of the 900 new BTC minted daily to cover operational costs, primarily energy consumption. At a price point of $50,000, Kendrick estimates that miners would only need to sell 20-30% of their new coins.
A reduction of this magnitude would decrease daily Bitcoin sales from the current 900 to just 180-270, a dramatic reduction in the annual BTC supply. Additionally, Bitcoin’s supply mechanics, which will halve the daily mining limit in April or May 2024, further contribute to this reduction.
Bitcoin will go through a halving in 2024, meaning that the reward for mining 1 BTC will lower by half, making BTC more valuable because less BTC will be in circulation. The last time Bitcoin halved, the industry saw its all-time high at $69,044.
Bitcoin Halving Chart from TradingView Via Rekt Capital
While speculative high-value Bitcoin predictions have been a regular occurrence in the past, it’s important to remember that these forecasts often don’t pan out. For instance, a Citi analyst predicted Bitcoin would reach $318,000 by the end of 2022, but BTC finished out the year at about $16,500 — a 65% dip — Reuters cited.
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