Benzinga - Standard Chartered, a multinational banking and financial services company, is expecting a meteoric rise in the value of the leading cryptocurrency Bitcoin (CRYPTO: BTC)
The firm predicts Bitcoin may ascend to $50,000 within this year and achieve an impressive $120,000 by the close of 2024.
The bank speculated the surging value of Bitcoin might incentivize Bitcoin "miners" to accumulate more units.
Previously in April, the bank projected a $100,000 valuation for Bitcoin by the end of 2024, anticipating the end of the "crypto winter,"
Geoff Kendrick, one of the leading FX analysts at the bank, now perceives a 20% potential increase to that estimate.
Kendrick suggested in his report, "Increased miner profitability per BTC (Bitcoin) mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher."
Despite a substantial 80% growth in the value of Bitcoin since the beginning of the year, its present value of roughly $30,200 remains significantly less than its previous peak of $69,000 in November 2021.
Also Read: Bitcoin, Ethereum And Now Mantle? New Layer-2 Network Proposes $200M Ecosystem Fund
The crypto sector underwent substantial losses in 2022, with trillions of dollars eradicated as a result of central bank rate hikes and several crypto firms' failures, including the FTX exchange.
However, the downfall of several traditional banks this year has contributed to a resurgence in crypto value.
Standard Chartered asserted that its price prediction was based on the idea that Bitcoin miners, who currently generate 900 new Bitcoin daily worldwide, would need to sell fewer Bitcoin to cover their operational costs, primarily electricity for high-performance computers.
According to Kendrick, miners have been selling all of their newly minted coins recently.
But if the price reaches $50,000, the sale percentage would likely drop to 20%-30%.
"It is the equivalent of miners reducing the amount of Bitcoin they sell per day to just 180-270 from 900 currently," he said.
If this trend persists, the annual selling of Bitcoin by miners would reduce drastically from 328,500 to a range of 65,700-98,550, leading to a significant decrease in the net BTC supply of approximately 250,000 Bitcoin per year.
Furthermore, due to an intrinsic supply and issuance mechanism designed to preserve Bitcoin's value, the daily limit of minable Bitcoin is projected to halve next April or May.
Read Next: 15 CBDCs Expected To Revolutionize Global Economy By 2030: Threat To Bitcoin And Ethereum?
Join Benzinga's Future of Crypto in New York city on Nov. 14, 2023, to stay updated on trends like AI, regulations, SEC actions and institutional adoption in the crypto space. Secure early bird discounted tickets now!
Photo: Shutterstock
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.