A curious alteration in the financial sector’s atmosphere towards Bitcoin manifests as the banking establishment, Standard Chartered, predicts a favorable trajectory for the dominant cryptocurrency. This banking stalwart, which in the recent past presaged BTC dropping to $5,000, now anticipates the crypto kingpin to rise ten times higher, ending the year with $50,000 in its kitty. Beyond that, the financial institution postulates Bitcoin hitting an ultra-impressive $120,000 by the end of next year.
The stimulating factor for this optimistic forecast, according to Geoff Kendrick, Global Head of Research & Chief Strategist at Standard Chartered, is the shifting supply dynamics. He sees miners now investing more resources in bolstering the network, subsequently reducing the amount of BTC they sell. This leads to a supply-demand imbalance, with the pendulum expected to swing in favor of the bulls.
However, the triumph of this perspective hinges on miners’ capability to maintain their revenues while selling less. As Kendrick opines, the increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, consequently reducing net BTC supply and pushing BTC prices higher.
As auspicious as it may sound, it’s crucial to not become blind to potential pitfalls. This projection presupposes the success of technological improvements worldwide. While it’s deemed as inevitable by many, it’s worth considering the consequences if the technological advancements fall short of expectations.
Artificial Intelligence (AI) is cast as a mainstay in this technology-driven future. Bitcoin’s unique attributes have led Arthur Hayes, the former CEO of an exchange platform BitMEX, to posit that AI will select Bitcoin as its currency of choice. But the question remains: what happens if AI doesn’t deliver as anticipated?
Despite the intriguing optimism, the investment landscape remains a sea fraught with sharks of risk. Standard Chartered’s upbeat forecast is a breath of fresh air, especially given its standing among revered mainstream banking establishments. But let’s also acknowledge the potential mishaps that could derail this vision. Only astute research and discerning decision-making will turn the tide in favor of investors.
Even amidst all the optimism, the crypto market remains a high-risk venture. Would-be investors should remember cautionary wisdom: never invest more than what you can afford to lose.
Source: Cointelegraph
