Bitcoin Poised to Reach US$100,000 by End-2024, Says StanChart Researcherby Fintech News Singapore April 25, 2023
Bitcoin is likely to reach US$100,000 by the end of next year in a sign that the crypto winter might be waning, according to lead researcher at Standard Chartered, Geoff Kendrick in a note on April 24.
As the bank’s Head of Crypto Research and Western Emerging Markets Forex Research, Kendrick believes that the recent banking sector crisis has helped to re-establish Bitcoin’s core use case as a decentralised, trustless and scarce digital asset. In addition, Kendrick says that troubles faced by stablecoins have aided Bitcoin in regaining its reputation as “digital gold”.
For instance, the USD Coin (USDC) was temporarily de-pegged as Circle, its issuer, held US$3.3 billion with Silicon Valley Bank (SVB), which was triggered by a bank run and had to be bailed out. Earlier in May 2022, the collapse of Terra/Luna resulted in the de-pegging of the Tether (USDT) stablecoin.
“Against this backdrop, Bitcoin has benefited from its status as a branded safe haven, a perceived relative store of value and a means of remittance,”
said Kendrick in his note.
Kendrick expects Bitcoin’s share of the total digital assets market cap to keep rising, most likely back to the 50-60% range, from 40% before the SVB collapse and 45% currently.
Following the SVB incident, Bitcoin surged from below US$20,000 to above US$30,000, increasing the profitability of Bitcoin mining companies, which Standard Chartered estimates are incurring costs of around US$15,000. The broader macro backdrop for risky assets is also gradually improving as the US Fed nears the end of its tightening cycle.
Kendrick believes that while Bitcoin can trade well when risky assets suffer, correlations to the Nasdaq suggest that it should trade better if risky assets improve broadly.
Looking ahead, Kendrick notes that the next Bitcoin halving is due around April to May 2024. Previous halvings have had a successively smaller impact on Bitcoin prices, but prices have bounced around each halving. Kendrick reasons that this should add a “cyclical tailwind to the structural positives at play”.
“Further positive regulatory steps in the US and UK are also likely. While sources of uncertainty remain, we think the pathway to the US$100,000 level is becoming clearer.”
the research head noted.