Standard Chartered Bank Analyst: Bitcoin Could Hit $100,000 By Year-End

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• Significant Bitcoin price increase ahead
• Macroeconomic situation boosts cryptocurrencies
• upcoming bitcoin halving

Bitcoin is currently trading at around $26,814 (as of May 11, 2023). Since the beginning of the year, the cyber currency has increased by more than 61 percent and at times even exceeded the 30,000 US dollar mark. Crypto market forecasts are becoming increasingly optimistic. This also applies to the latest study by Standard Chartered Bank, which sees the world’s largest cryptocurrency on the way to the 100.00 US dollar mark.

Bitcoin price: Good macroeconomic conditions provide a boost

Bitcoin is currently benefiting from its image as a safe haven, store of value and means of transaction. The banking crisis made “digital gold” attractive again for investors. Investors see safe investment opportunities again in the decentralization of digital assets.

A study by Coinbase also points out that the performance of the Bitcoin course accelerated when the banks got into the crisis. The problems in the banking sector amplify the store of value and hedging properties of cryptocurrencies, most notably Bitcoin, as they exist outside of the traditional banking system.

At the same time, as the Federal Reserve’s monetary tightening cycle nears its peak, the broader macro backdrop for risky assets is improving, according to Standard Chartered Bank analysis. “While BTC may trade well when risk-on assets are suffering, correlations to NASDAQ suggest it should trade better when risk-on assets are improving across the board,” Standard Chartered Bank analyst Geoff Kendrick is quoted as saying in the research note. He also cites the European Union’s crypto regulatory efforts as a positive effect on the Bitcoin price.

In addition, Standard Chartered Bank expects Bitcoin to become more dominant in terms of crypto market capitalization. “Again, we’re seeing an uptick lately based on Bitcoin’s use case and its connection to issues in the traditional financial system. The desire for a liquid asset in the crypto space means Bitcoin’s dominance is likely to increase going forward,” he said Geoff Kendrick in an interview with forkast. Bitcoin’s market dominance is currently around 47 percent, and experts expect the market share to increase to 50 to 60 percent in the near future. For comparison: In mid-March, at the time of the collapse of Silicon Valley Bank, Bitcoin’s market share was around 40 percent.

Bitcoin halving: shortage of supply as a price driver

The Biltcoin halving planned for the end of 2024 could also provide a boost. “As we get closer to the next halving, we expect cyclical drivers to become more constructive like they have been in previous cycles,” predicts Geoff Kendrick.

Bitcoin enthusiasts are hoping for a further boost from the “halving” of the reward for Bitcoin mining, which takes place approximately every four years (every 210,000 blocks). With the reduction in block rewards from 6.25 Bitcoin to 3.125 Bitcoin, the supply is becoming tighter. If demand remains the same, a significant price increase is likely. In the past – 2012, 2016 and 2020 – the halving led to substantial price increases. Following the last halving, in May 2020, when the block reward was reduced to 6.25 bitcoin, the bitcoin price rallied from below $8,700 to as high as $69,045 (11/10/2022).

According to Reuters, JPMorgan analysts are also optimistic in a note for the next halving and describe the increase in production costs as a “positive psychological effect” that could boost the price.

It remains to be seen whether the course of the cyber veteran will also show a comparable rally at the next halving. A direct causal connection between the individual events in the past cannot be reliably established either, but a connection between the shortage of supply, Bitcoin demand and the price is obvious.

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