Bitcoin may reach $120,000 in value by the end of 2024 due to miners reducing their token sales, according to Standard Chartered analysts.
In April, Standard Chartered released a prediction of $100,000 for Bitcoin by the end of 2024, suggesting that the “crypto winter” had ended. However, Geoff Kendrick, head of the crypto research team at Standard Chartered, now suggests a 20 percent upside to their previous prediction.
They now anticipate the price to reach $50,000 by year-end, with a potential surge to as high as $120,000 in 2024.
“Increased miner profitability per BTC mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher,” Kendrick wrote in a report.
Miners are expected to gradually reduce their sales to cover operational expenses, mainly the cost of electricity, to run their energy-demanding computing systems. Globally, they are responsible for producing around 900 new Bitcoins each day. If the price reaches $50,000, they may reduce their sales to around 20 to 30 percent.
“It is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently,” Kendrick said.
Kendrick further noted that over a year, this would decrease miner sales from 328,500 Bitcoins to between 65,700 and 98,550 units. As a result, the net supply of BTC will be reduced by around 250,000 tokens annually.
Bitcoin, the largest cryptocurrency by market value, traded at $30,495.67 on Tuesday, marking a 1.18 percent increase. Even though it has surged more than 82 percent this year, the number is still below its record high of nearly $69,000 in November 2021.
In 2022, the crypto sector lost trillions of dollars due to central banks raising interest rates and the collapse of various crypto firms, including crypto exchange FTX. Banking crises in several countries, including the U.S., have contributed to a rebound in the crypto industry.
By April or May of next year, there is an anticipated halving in the daily production of new Bitcoins. This reduction results from Bitcoin’s inherent supply and issuance mechanism that limits the supply to preserve its appeal.
It means that the supply of Bitcoin rewards available to miners would be decreased by half during this event, from around 900 per day to about 450. This mechanism maintains Bitcoin’s total supply below the limit of 21 million tokens.
On-chain analyst Willy Woo has also said that Bitcoin is currently in the “early stages of another price squeeze.” There is a potential price surge for Bitcoin as major financial institutions with $27 trillion in assets enter the cryptocurrency space. This coincides with the race to launch the first spot Bitcoin exchange-traded fund (ETF).
In recent developments, Matrixpoint made another prediction last week that Bitcoin would reach $125,000 by the end of 2024. Around the same time, venture capitalist Tim Draper said BTC would surge to $250,000 within the next two years.
Analysts also made optimistic predictions for the token before its previous rallies. In November 2020, a Citi analyst suggested that Bitcoin could reach $318,000 by the end of 2022. By the end of last year, Bitcoin closed at around $16,500, a 65 percent decline.
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