Crypto winter is over — and bitcoin could hit $100,000 by the end of 2024, Standard Chartered says

Bitcoin’s worth may bounce to as a lot as $100,000 by the tip of 2024, Standard Chartered mentioned in a word printed Monday.

The collapse of Silicon Valley Bank and different mid-tier U.S. lenders has solidified the case for bitcoin as a “decentralised, trustless and scarce digital asset,” Standard Chartered analyst Geoff Kendrick mentioned within the word.

“We see potential for Bitcoin (BTC) to reach the USD 100,000 level by end-2024, as we believe the much-touted ‘crypto winter’ is finally over,” Kendrick mentioned within the report, titled “Bitcoin — Pathway to the USD 100,000 level.”

“The current stress in the traditional banking sector is highly conducive to BTC outperformance – and validates the original premise for Bitcoin as a decentralised, trustless and scarce digital asset,” Kendrick added.

“Given these advantages, we think BTC’s share of total digital assets market cap could move into the 50-60% range in the next few months (from around 45% currently).”

Bitcoin was buying and selling at $27,601.55 as of 9:40 a.m. ET, based on CoinGecko information.

The woes of Circle’s USD Coin and different so-called stablecoins, which intention to attain a 1-to-1 peg to the U.S. greenback, has additionally benefited bitcoin, Kendrick mentioned.

USDC misplaced its peg to the greenback after its issuer Circle revealed publicity to SVB. The coin has since regained its $1 worth, nonetheless its whole market worth has fallen to $30.7 billion from greater than $43 billion since Mar. 10 when the financial institution was positioned into receivership by the U.S. authorities, based on CoinGecko information.

This, coupled with a stabilization of danger property and hypothesis that the Federal Reserve will ease financial tightening additional, means the “pathway to the USD 100,000 level is becoming clearer,” Kendrick mentioned.

Proponents of bitcoin keep the digital foreign money is an asset value diversifying into in occasions of financial misery. As the speculation goes, bitcoin has a restricted provide of 21 million bitcoins, that means it ought to admire as demand for different property grows to keep away from the consequences of excessive inflation.

The cryptocurrency failed that take a look at final yr when it plunged 65%, marking the second-worse yr for bitcoin of all time amid a tumultuous backdrop of multibillion-dollar flameouts reminiscent of FTX and Terra and regulatory clampdowns.

More just lately, nonetheless, the token has been climbing, suggesting a restoration could also be on the playing cards. Bitcoin is up 66% for the reason that begin of the yr — although it has fallen sharply since breaching $30,000 two weeks in the past.

“The associated price jump – from below USD 20,000 before the SVB issues to above USD 30,000 – has dramatically increased the profitability of Bitcoin mining companies,” Kendrick wrote.

Bitcoin miners are volunteers who allocate computing energy towards fixing advanced cryptographic puzzles with a purpose to confirm transactions are real and mint new items of foreign money.

“With the price of BTC now well above our USD 15,000 estimate of direct costs, miners are unlikely to sell many coins,” Kendrick mentioned, noting that this may be a constructive growth for the cryptocurrency as miners are a significant driving power for the market given the dimensions of their holdings.

“The broader macro backdrop for risky assets is also gradually improving as the FOMC nears the end of its tightening cycle. While BTC can trade well when risky assets suffer, correlations to the Nasdaq suggest that it should trade better if risky assets improve broadly.”

Standard Chartered is not the one one predicting a powerful rally of bitcoin’s value. Last month, at a blockchain convention in Paris, a number of crypto business insiders forecast bitcoin hitting a brand new all-time excessive in 2023 — with an government at U.S.-headquartered cryptocurrency alternate Gemini telling CNBC $100,000 may very well be a chance.

Last yr, CNBC quizzed a number of enterprise capitalists, traders and analysts on how they assume the digital foreign money will carry out in 2023. On the bullish finish of the spectrum, Draper Associates founder and famous bitcoin bull Tim Draper mentioned he thought the cryptocurrency may attain $250,000.

Ironically, on the bearish finish, Standard Chartered mentioned that the cryptocurrency may tumble as little as $5,000 in an inventory of market shock for 2023.

Some crypto traders are pointing to anticipation of the subsequent so-called bitcoin “halving,” which reduces the rewards to bitcoin miners by 50%, as a possible catalyst for an additional monster rally within the coin’s value.

— CNBC’s Arjun Kharpal contributed to this report