Standard Chartered Bank Predicts Bitcoin Could Still Drop to $50k

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According to a recent analysis by Standard Chartered Bank, Bitcoin’s value might face further decline, possibly plummeting to $50,000. This prediction raises questions about the stability of the cryptocurrency market and the factors influencing its volatility.

Several Market Factors Affect Bitcoin Valuation

Bitcoin (BTC), the pioneering cryptocurrency, has experienced significant fluctuations in its price over the past year. After reaching all-time highs, the digital asset encountered notable corrections, causing concerns among investors and analysts alike.

Meanwhile, the assessment by Standard Chartered Bank is based on several market indicators and fundamental factors affecting Bitcoin’s valuation. According to Geoffrey Kendrick, head of the bank’s forex and digital assets research, the consecutive outflows from the United States Spot Bitcoin Exchange-Traded Funds (ETFs) and the current average ETF purchase price being below $58,000 could bring about liquidation.

Geoffrey also mentioned that the low volume of Hong Kong spot ETFs contributed to the recent BTC price fall. Likewise, regulatory developments, macroeconomic conditions, and investor sentiment could contribute to further price corrections.

Standard Chartered Year-End Target Still Remains

Despite the potential for a price decline, the long-term outlook for Bitcoin remains a subject of debate. Recall that Standard Chartered Bank revised its Bitcoin price prediction target in March, raising it to $150,000 by the end of 2024, up from its previous estimate of between $100,000 and $120,000.

The decision to increase the target arises due to the ongoing robust inflows into newly launched spot Bitcoin ETF in the US, alongside the favorable price momentum of Bitcoin. The bank continues to uphold its Bitcoin price projection of $200,000 by the end of 2025. 

However, this forecast draws parallels with the historical movement of gold prices after the introduction of U.S. gold ETFs, alongside a portfolio optimization approach advocating an 80% allocation to gold and 20% to Bitcoin.

Impact of Spot BTC ETFs Approval

Interestingly, the spot BTC ETF approval signals a growing acceptance and recognition of the legitimacy of digital assets in mainstream financial markets. Additionally, this development could lead to an influx of institutional capital into the cryptocurrency market, further legitimizing and mainstreaming digital assets.

As the cryptocurrency continues to gain mainstream acceptance and adoption, price forecasts serve as valuable indicators of market sentiment, shaping investors’ perceptions and driving market dynamics.

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