LAGOS, Nigeria (VOICE OF NAIJA) – Standard Chartered predicted on Monday that the value of the most popular cryptocurrency, bitcoin, might reach $50,000 (approximately Rs. 41,19,200) this year and $120,000 (about Rs. 98,85,800) by the end of 2024.
The bank also noted that the recent increase in price may have encouraged bitcoin “miners” to stockpile more of the supply.
In April, Standard Chartered predicted that bitcoin would be worth $100,000 (approximately Rs 82,38,000) by the end of 2024, believing that the so-called “crypto winter” was over.
However, Geoff Kendrick, one of the bank’s top FX analysts, claimed that there was now a 20% “upside” to that prediction.
READ ALSO: Twitter To Use Crypto For Transactions, Musk Begins New Simple Payment Method
In a research, Kendrick stated that increased miner profitability per BTC (bitcoin) mined means they may sell less while maintaining cash inflows, cutting net BTC supply and raising BTC prices.
Although the price of bitcoin has increased by over 80% since the beginning of the year, its current value of just over $30,200 (approximately Rs. 24,87,900) is still far behind the peak of $69,000 (about Rs. 56,84,000) reached back in November 2021.
As central banks raised interest rates and a number of cryptocurrency businesses, like the FTX exchange, collapsed, trillions of dollars were wiped out of the market in 2022. However, the collapse of several traditional-style banks this year has fueled the recovery.
According to Standard Chartered, the reason for the anticipated price increase is that miners, who create the 900 new bitcoins every day worldwide, would eventually need to sell fewer of them in order to cover their expenditures, which primarily consist of electricity used to run.
Kendrick estimated that miners have recently been selling 100 percent of their new coins. If the price hits $50,000 (roughly Rs. 41,19,000) though, they would probably only sell 20-30 percent.
“It is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently.”
READ ALSO: Nigeria Ranks In Top 10 For World’s Crypto Adoption – EMURGO Africa Report
“Over a year, that would reduce miner selling from 328,500 to a range of 65,700-98,550 – a reduction in net BTC supply of roughly 250,000 bitcoins a year.”
Due to an inbuilt supply and issuance system that gradually limits supply to retain its attractiveness, the total number of bitcoins that can be mined daily is likewise expected to halve in April or May of next year.
During previous bitcoin rallies, predictions of exorbitant valuations were frequently made. In November 2020, a Citi analyst predicted that by the end of 2022, bitcoin may reach a high of $318,000 (approximately Rs. 2.6 crore). It ended last year at $16,500, a loss of around 65 percent (or roughly Rs. 13,59,200 crore).