Bitcoin Miners Set to Hoard Supply

Leading global financial institution, Standard Chartered Bank, has predicted that the cryptocurrency could reach an impressive $120,000 by the close of 2024. The bank previously forecasted a year-end valuation of $100,000 for Bitcoin last April, but one of its top foreign exchange (FX) analysts, Geoff Kendrick, now sees an additional 20% potential upside to that estimate.

This optimistic outlook comes as Bitcoin's price has surged by 80% since the beginning of this year, although it remains below its peak of $69,000 in November 2021, currently hovering at just over $30,200. 

Standard Chartered attributes the anticipated rise in Bitcoin's price to the reduced selling pressure from miners. As Kendrick estimated, miners currently sell 100% of their newly minted coins. But they would sell only 20-30% if Bitcoin reaches $50,000. This reduction in selling would equate to a decrease in net Bitcoin supply by approximately 250,000 bitcoins annually, significantly impacting the market dynamics.

However, Bloomberg Intelligence's senior macro strategist Mike McGlone suggests that Bitcoin has not yet finished its recovery in his latest report, "Crypto Outlook, June 2023." McGlone explains that current trends, in addition to various factors, and the Federal Reserve's stance are bearish for BTC.

While several factors can influence Bitcoin's price, such as regulatory developments, monetary policy decisions by the Federal Reserve, and technological improvements addressing transaction speed and fees, the impending halving of Bitcoin's daily mining rewards next year also plays a role. This mechanism gradually reduces supply to maintain scarcity and will contribute to the cryptocurrency's allure and scarcity value.