Bitcoin, the world’s largest cryptocurrency, has been quietly rising in 2023.
Chris Ratcliffe | Bloomberg | Getty Images
Bitcoin The value could jump to $100,000 by the end of 2024, Standard Chartered said in a report published on Monday.
Standard Chartered analyst Geoff Kendrick said in a report that the collapse of Silicon Valley Bank and other mid-sized U.S. banks has solidified Bitcoin’s case as a “decentralized, trustless and scarce digital asset.”
“We see the potential for Bitcoin (BTC) to hit the $100,000 level by the end of 2024 as we believe the much-touted ‘crypto winter’ is finally over,” Kendrick said in a speech titled “Bitcoin – The Path to the Dollar.” way,” the report said. One hundred thousand level. “
Kendrick added: “The current stress in traditional banking is very much in favor of BTC’s outperformance — and validating the original premise of Bitcoin as a decentralized, trustless, and scarce digital asset.”
“Given these strengths, we believe BTC’s share of total digital asset market capitalization could rise to the 50-60% range (currently around 45%) in the coming months.”
Bitcoin was trading at $27,601.55 as of 9:40 a.m. ET, according to CoinGecko data.
Bitcoin has also benefited from the woes of Circle’s USD Coin and other so-called stablecoins that aim to achieve a 1-to-1 peg to the U.S. dollar, Kendrick said.
USDC lost its peg to the U.S. dollar after its issuer, Circle, disclosed its exposure to SVB. The token has since regained its $1 value, but its total market capitalization has dropped from more than $43 billion to $30.7 billion since the bank was taken over by the U.S. government on March 10, according to CoinGecko.
That, combined with stabilization in risk assets and speculation that the Fed will ease monetary tightening further, means “the path to the $100,000 level is becoming clearer,” Kendrick said.
Proponents of Bitcoin argue that the digital currency is an asset worth diversifying during tough economic times. In theory, Bitcoin has a limited supply of only 21 million bitcoins, meaning it should appreciate in value as demand for alternative assets grows to avoid the effects of high inflation.
The cryptocurrency plunged 65 percent last year, marking bitcoin’s second worst year ever, amid the multibillion-dollar shutdowns of FTX and Terra and a tumultuous regulatory response.
Recently, however, the coin has been climbing higher, suggesting a recovery may be on the horizon. Bitcoin is up 66% since the start of the year — though it has fallen sharply since breaking above $30,000 two weeks ago.
“The associated price increase — from below $20,000 to over $30,000 prior to the SVB launch — has dramatically increased the profitability of bitcoin mining companies,” Kendrick wrote.
Bitcoin miners are volunteers who allocate computing power to solve complex cryptographic puzzles to verify the authenticity of transactions and mint new units of currency.
“With the price of BTC now well above our estimated direct cost of $15,000, it’s unlikely miners are selling many tokens,” Kendrick said, noting that this is a positive development for cryptocurrencies because miners are the market’s The main driver given the size of their holdings.
“The broader macro backdrop for risk assets is gradually improving as the FOMC nears the end of its tightening cycle. While BTC can trade well when risk assets take losses, the correlation with the Nasdaq suggests that If risk assets generally improve, it should trade better.”
Bitcoin price outlook
Standard Chartered is not the only bank predicting a strong rise in Bitcoin prices. Last month, at a blockchain conference in Paris, multiple crypto industry insiders predicted Bitcoin would hit a new all-time high in 2023 — an executive at U.S.-based cryptocurrency exchange Gemini told CNBC, Bitcoin has the potential to reach $100,000.
Last year, CNBC Several venture capitalists, investors and analysts were asked about how digital currencies will perform in 2023. On the bullish end, Draper Associates founder and famed bitcoin bull Tim Draper said he thinks the cryptocurrency could hit $250,000.
Ironically, on the bearish side, Standard Chartered said the cryptocurrency could drop to $5,000 in 2023 on its list of market surprises.
Some cryptocurrency investors point to anticipation of the next so-called bitcoin “halving,” in which bitcoin miners’ rewards are cut by 50 percent, as a potential catalyst for another sharp rise in bitcoin’s price.
— CNBC’s Arjun Kharpal contributed to this report