A Bold Prediction Amidst ETF Hopes
In a striking projection, Standard Chartered, a multinational banking giant, predicts that Bitcoin (BTC) could soar to nearly $200,000 by late 2025, contingent on the approval and success of Bitcoin exchange-traded funds (ETFs) in the United States. This forecast hinges on the belief that spot Bitcoin ETFs could attract inflows ranging from $50-100 billion in 2024.
The Underpinnings of the Forecast
Standard Chartered’s head of digital assets, Geoff Kendrick, and precious metals analyst Suki Cooper based this prediction on the assumption that U.S.-listed spot Bitcoin ETFs could hold between 437,000 and 1.32 million Bitcoin by the end of 2024. Their report, shared on X (formerly Twitter), suggests that Bitcoin could multiply by 4.3 times from its current price of around $47,000 to reach this target.
Drawing Parallels with Gold ETFs
Kendrick and Cooper draw a parallel with the history of gold exchange-traded products (ETPs), which experienced similar growth over seven to eight years post-launch in November 2004. However, they anticipate Bitcoin’s growth to be more rapid, potentially materializing over one to two years, given the expected faster development of the BTC ETF market.
A “Watershed Moment” for Bitcoin
The approval of spot Bitcoin ETFs is seen as a pivotal moment in normalizing Bitcoin participation. This sentiment aligns with Standard Chartered’s previous prediction of Bitcoin reaching $100,000 by the end of 2024.
Beyond ETFs: Strengthened Bitcoin Network Fundamentals
Blockchain strategist Jamie Coutts emphasizes Bitcoin’s strengthened network fundamentals as another key factor. Coutts points out that Bitcoin’s network fundamentals, including novel use cases like inscriptions, are at an all-time high, suggesting that Bitcoin is currently undervalued, despite being 40% below its peak.
A Contrasting View from Bloomberg Intelligence
Contrary to Standard Chartered's bullish outlook, Bloomberg Intelligence’s senior macroeconomic strategist, Mike McGlone, expressed skepticism. During a Macro Monday talk show, McGlone cautioned that Bitcoin, as a risky asset, might not sustain its rally post-ETF approval. He advised caution, noting the historical pattern of risk assets declining following such hype-driven rallies.
Balancing Optimism with Caution
While Standard Chartered's prediction offers an optimistic outlook for Bitcoin, it's crucial for investors and market observers to balance this optimism with caution. The potential approval of Bitcoin ETFs could indeed be a game-changer for the cryptocurrency, but the market’s response and broader economic factors will ultimately dictate Bitcoin's trajectory in the coming years.