Standard Chartered’s Geoff Kendrick predicts that as long as spot Exchange-traded Fund (ETF) inflows for Bitcoin remain strong reserve managers will continue buying more cryptocurrency.
Kendrick also predicts that support will also come from the April 2024 Bitcoin (BTC) halving event. As well as the gold-to-bitcoin portfolio optimization.
Standard Chartered (STAN) raised its 2024 year-end forecast for bitcoin’s price to $150,000 from $100,000.
The bank also predicted BTC will reach a high for the cycle of $250,000 by 2025 before settling back down to around $200,000, according to an emailed investment note shared with stakeholders.
Standard Chartered has founded its analysis by comparing the price of gold after gold exchange-traded funds (ETFs) were introduced in the U.S.
The acquisition of gold ETF’s were correlated between ETF inflows and the current BTC price to arrive at the forecasted price. Spot bitcoin ETFs started trading in the U.S. in January, 2024.
“We think the gold analogy – in terms of both ETF impact and the optimal portfolio mix – remains a good starting point for estimating the ‘correct’ BTC price level medium-term”
– Standard Chartered Bank
To truly appreciate the actual market valuation of bitcoin, investors also recognize that the perceived cap of 21 million coins does not accurately reflect reality of the market.
As there could be actually be a reduction of anywhere from 10% to 20% less coins which limits trading availability thereby increasing the potential value of the currency.
“If ETF inflows reach our mid-point estimate of $75 billlion, and/or if reserve managers buy BTC, we see a good chance of an overshoot to the $250,000 level at some stage in 2025.”
– Geoff Kendrick
Standard Chartered also stated the Securities and Exchange Commission could approve an Ethereum (ETH) ETF as early as May 23, 2024.
This would potentially increase inflows to as much as $45 billion in the first year of trading. While the prediction valuation for ETH would be to reach a price high of around $8,000 by the end of 2024.
Currently the digital currency was recently trading around $3,570, which would double its valuation.
“In 2025, we see the ETH-to-BTC price ratio rising back to the 7% level that prevailed for much of 2021-22, \given our estimated BTC price level of USD 200,000 at end-2025, that would imply an ETH price of $14,000.” Standard Chartered concluded in a separate statement.
