Standard Chartered, a prominent banking institution, has recently made a significant shift in its stance on Bitcoin (BTC) by predicting a substantial price recovery. Contrary to its previous forecast of BTC dropping to as low as $5,000, the bank now anticipates the cryptocurrency to reach $50,000 by 2023, followed by a further surge to $120,000 by the end of the following year. This change in perspective aligns with the evolving narrative surrounding Bitcoin, particularly in the wake of institutional adoption in the United States.
Supply Dynamics Driving Price Growth
The reason behind Standard Chartered’s optimistic outlook lies in the supply dynamics of Bitcoin. As miners allocate more resources to maintaining the network, they are simultaneously reducing the amount of BTC they sell. This creates an imbalance between supply and demand, ultimately favoring the bulls in the market. The report highlights that increased profitability per BTC mined allows miners to sell fewer coins while still generating cash inflows. Consequently, this leads to a decrease in the net supply of BTC, driving its price upwards.
The “BlackRock Effect”
Standard Chartered’s positive prediction for BTC prices is not an isolated occurrence but rather part of a broader trend dubbed the “BlackRock effect.” The decision by BlackRock, a major asset manager, to file for a spot Bitcoin exchange-traded fund has had a significant impact on how mainstream media perceives and discusses Bitcoin. This move has been emulated by other prominent asset managers, thereby contributing to a more favorable narrative around the largest cryptocurrency.
Technological Advancements and Bitcoin’s Bright Future
According to Arthur Hayes, former CEO of BitMEX, the consistent progress in technological advancements worldwide will play a pivotal role in driving Bitcoin’s value to new heights. Hayes specifically highlights the potential role of artificial intelligence (AI), suggesting that AI will choose Bitcoin as its preferred currency due to its unique attributes. This endorsement further reinforces the positive outlook for Bitcoin’s future.
Standard Chartered’s involvement in the cryptocurrency industry extends beyond its price predictions. The bank has already made strides in the crypto space with the launch of its crypto custody platform, Zodia, which successfully raised $36 million in a Series A funding round in April. This demonstrates the institution’s commitment to embracing and leveraging the opportunities presented by cryptocurrencies.
Standard Chartered’s revised forecast for Bitcoin’s price paints a highly optimistic picture for the cryptocurrency. With the potential for BTC to reach $50,000 in 2023 and surpass its all-time highs in 2024, the supply dynamics driven by miners and the broader institutional adoption of Bitcoin contribute to this positive outlook. Furthermore, the consistent technological advancements and the potential endorsement of Bitcoin by artificial intelligence further solidify its bright future.