In a recent twist of events, the world’s giant cryptocurrency, Bitcoin, might spin upwards to hit a colossal $50,000 by this year’s end. By 2024, it could reach a whopping $120,000, according to a research report by Standard Chartered Bank. It appears that the British banking powerhouse has markedly increased their Bitcoin price forecast from the $100,000 anticipated in April.
The intriguing turn in fortunes arises from the bank concluding that Bitcoin’s potential to reach the former estimate stems from a myriad of factors led by the looming banking-sector crisis. It therefore follows that their April estimation was overly conservative, and a subsequent readjustment pushing the 2024 target upwards is an opportune move.
It’s worth noting that Bitcoin set off on a bullish start this year, having surged 80% since January. Currently, its trading circles hover approximately around $30,100. One might wonder: what’s been driving this price shift?
The research report illuminates the role of boosted bitcoin miner profitability in catapulting the price this time around. As Geoff Kendrick, head of FX and digital asset research pens down: miners, who maintain the Bitcoin ledger, also play a pivotal role in shaping the net supply of freshly minted Bitcoin. Therefore, an upswing in miner profitability per Bitcoin mined suggests that miners can sell a smaller portion of their yield while keeping cash inflows stable. Undeniably, this is an astute strategy designed to scale down net Bitcoin supply, ostensibly pushing the prices higher.
However, while this outlook may stimulate mirth among crypto-enthusiasts, let’s not forget the unpredictability that often shrouds crypto markets. A pendulum swing is not a remote possibility, after all.
The center of our consideration should be the counteracting forces at play. Stellar miner profitability may reduce Bitcoin supply, driving prices up. On the flip side, the looming banking-sector crisis spells an uncertain future for the Bitcoin market.
At the end of the day, prudence in gauging both bright prospects and looming threats would be the key for stakeholders in this teetering environment.
Source: Coindesk
