The “crypto-winter” is over. At least that is the forecast of some analysts (including us) that has generated great interest in the crypto community, and adds to the wave of optimism that has surrounded bitcoin (BTC) now that more financial institutions join the world of digital currencies.
The perception of the king of virtual money is changing in his favor and that of his holders, so it is not unreasonable to say that he is back on his own.
For the record, there are multiple signs that the leading cryptocurrency is leaving its “winter” period behind and that will mark a new milestone in its value, is what a recent report by the British bank Standard Chartered sayswhich heralds an optimistic future for the bitcoin price.
The news portal specialized in digital currencies Cointelegraph, which had access to said report, says that the price of the bitcoin could reach as high as $120,000 by the end of 2024.
Here we warn you that such specific predictions are a kind of “guessing” game that we don’t like to play in this space, so we ask you to take it with a grain of salt. The exact timing is impossible to know in advance.
However, Standard Chartered signals a change in the narrative around bitcoin, especially in the United States, where there have been major shifts in the institutional approach to cryptocurrency.
Until very recently, this international bank had predicted that the price of bitcoin would fall to 5,000 dollarsbut now it has revised its estimate upwards and affirms that it could close 2023 at around 50,000 dollars.
I insist that the specificity of the times cannot be predetermined, but we agree here at Top Money Report that the trend will be strongly bullish.
The analysis is based on the fact that the increase in price is due to the dynamics of supply and demand. Bitcoin miners, dedicating more and more resources to maintaining the network, are selling less, creating an imbalance that favors bullish investors in the long run.
In the first quarter of 2023, the 12 largest miners of the leading crypto sold 106 percent of what was extracted (using their reserves), but it is estimated that in the April-June period this ratio has dropped. If the price reaches $50,000, as expected, the proportion of the newly mined digital currency being offered is estimated to fall to 20-30 percent, representing an annual decline in BTC sales of 250,000.
Such numbers would have a significant impact on bitcoin’s inflation rate.which would decrease to around 0.4 percent per yearbelow the gross inflation rate after the next halving in 2024.
It should be remembered that the “halving” is an event in which the reward for cryptocurrency mining is halved, which occurs every four years in the case of bitcoin. This means that the amount of new BTC entering the market decreases by 50 percent each time.
This would be meaningless if it weren’t for the fact that the use and acceptance of crypto is expected to continue to increase, which will increase the value and prices of all bitcoin already in existence.
Let’s explain a little more: Given that the demand for cryptocurrencies has remained strong and is expected to be higher, this reduction in supply added to the accumulation that investors are doing -instead of selling it on the market-, makes bitcoin and the altcoins become RELATIVELY scarcer (as happens with gold in the physical world whose stocks are always rising, but who owns it does not want to sell it more than at a price that they consider to reflect its true value, higher every day due to the massive impression of money and the exponential expansion of debt on the planet).
It is undeniable that as more financial institutions show interest and get involved in the world of digital money, bitcoin perception is changing in traditional media.
The Standard Chartered report is just one more example of the so-called “BlackRock effect”, which refers to the change in attitude towards BTC after that firm, which is one of the “mainstream” asset managers, submitted an application to a bitcoin exchange-traded fund (ETF).
In short, welcome what could be the new “crypto summer”. We hope that, as millions of investors around the world will, you can also take advantage of it, and for that, do not detach yourself from the content that we offer you in Top Money Report.
Editor’s Note: This text belongs to our Opinion section and reflects only the author’s vision, not necessarily the High Level point of view.
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William Beard Master in Economics from the Austrian School; liberal, gold market specialist and editor of investment newsletter Top Money Report