Supply shock could push Bitcoin to $120,000
Bitcoin price is forecasted to reach $120,000 by the end of 2024 due to a sharp drop in the demand for Bitcoin by miners.
Back in April, Standard Chartered forecast Bitcoin to reach $100,000 by the end of 2024, stating that “crypto winter is over.” However, in the latest report published by the bank's analyst Geoff Kendrick, the number increased by 20% to $120,000.
Model of a Bitcoin room inside a computer board. Photo: Reuters
The impetus for this increase, according to Kendrick, comes from the fact that miners won't need to sell as much Bitcoin to cover the costs - mostly electricity to run the mining supercomputers. "The increase in profit per Bitcoin means they need to sell less. The supply will decrease and push the price of Bitcoin up," he said.
According to statistics, every day miners are creating 900 new Bitcoins and have to sell them all to stay afloat. Meanwhile, if the price of this digital currency reaches $50,000, they only need to sell about 20-30%, or 180-270 Bitcoins per day.
In a year, the supply is expected to decrease by 250,000 Bitcoins. In addition, next April or May is the period of the "Bitcoin halving" event. The term refers to a mechanism that occurs every four years, during which the amount of Bitcoin "rewards" to miners is halved.
These supply shocks are predicted to pull the Bitcoin price to a peak.
This year, Standard Chartered thinks the price of Bitcoin could reach $50,000. Currently, each of these coins is about more than $30,000, up 80% since the beginning of the year, but still less than half of the peak of $69,000 at the end of 2021.
At that time, many experts of major financial institutions gave positive forecasts for Bitcoin, such as Citi analyst valuing this digital currency to reach more than 300,000 USD by the end of 2022. However, the opposite is true when Bitcoin loses gradually in value, sometimes down to 16.5 thousand USD. The cryptocurrency market also went through a dark period when a series of companies and exchanges, including FTX, went bankrupt. However, the collapse of some traditional banks also contributed to the partial recovery of this market.