- In April, it predicted that Bitcoin could reach $100,000 next year, but now considers this estimate to be conservative when taking miner profitability into account.
- Kendrick estimated that all Bitcoin would be sold by miners in the second quarter but believes miners will start selling less over time.
- In recent weeks, Bitcoin has surpassed $30,000 after Wall Street giants showed interest in creating their own Bitcoin ETFs.
Standard Chartered analyst Geoff Kendrick reiterated his Bitcoin price predictions in a recent note: What are the expectations?
Standard Chartered Reiterates Bitcoin Prediction
According to Standard Chartered analyst Geoff Kendrick, with miners reducing sales of the top cryptocurrency, Bitcoin could reach $120,000 by the end of 2024. In April, he predicted that Bitcoin could reach $100,000 next year, but now considers this estimate to be conservative when taking miner profitability into account.
Geoff Kendrick wrote the following in a recent note: “We are reiterating our BTC year-end price target of around $100,000, with the potential for an increase due to decreasing miner sales.” In an email sent to an insider, Kendrick mentioned that a $120,000 price is valid and represents an almost 300% increase from these levels. He also expects Bitcoin to rise by 67% this year to reach $50,000.
The increasing trend in prices is attributed to the rise in mining profitability, which means miners can sell fewer tokens to maintain the same amount of cash flow. This reduces the supply of Bitcoin and raises prices.
Kendrick estimated that all Bitcoin would be sold by miners in the second quarter but believes miners will start selling less over time. Historically, this occurs when Bitcoin’s price exceeds the average total cash cost of mining.
“If the BTC price reaches $50,000 in the first quarter of 2024, as we predict, the ‘BTC less all cash costs’ calculation will rise to $30,000. Essentially, selling only 27% of the BTC mined in the first quarter of 2024 will generate the same absolute level of excess cash as selling 100% in the second quarter of 2023.”
This would be enough to reduce Bitcoin’s net supply by approximately 250,000. This not only suppresses prices but also has an impact on the inflation rate, reducing it from an annual basis of 1.7% to 0.4%.
Bitcoin ETF Expectations Boost Price Momentum
In recent weeks, Bitcoin has surpassed $30,000 after Wall Street giants showed interest in creating their own Bitcoin ETFs. This has led to other bullish calls for the crypto token, and Tom Lee from Fundstrat recently predicted a value of $200,000 within the next few years.
Mining profitability is increasing as the cost of producing new Bitcoin drops. Large-scale miners, such as companies like Riot and Core Scientific, have cut expenses, while energy prices have also decreased. Meanwhile, “halving” events, where the amount of Bitcoin produced by mining is halved – the next one expected in April or May 2024 – typically lead to industry consolidation, further reducing mining expenses.
