Bitcoin Gets $120,000 Prediction As China Boosts CBDCs
A recent report from banking titan Standard Chartered is circulating with a stunning Bitcoin (BTC) price prediction of $120,000 by 2024. The reasons cited for this dramatic price rise include an upcoming 'supply shock' for the world's first cryptocurrency, as Bitcoin miners are predicted to hoard their reserves of BTC, driving scarcity and higher prices.
Standard Chartered hasn't always been bullish on Bitcoin. It forecasted low prices of just $5,000 only last year. But a shift in global attitudes towards cryptocurrency, wider adoption and favourable regulation outcomes have caused them to take a U-turn, and the latest report from Geoff Kendrick, Standard Chartered's global head of research and chief strategist, predicts that BTC/USD will hit $50,000 this year before breaking new all-time highs in 2024.
Kendrick's reasoning is based on supply dynamics. As Bitcoin's price recovers, miners will sell an increasingly smaller percentage of their coins, thus hoarding BTC for greater profit, reducing the amount of coins in circulation, and driving a bullish market cycle. According to the report: "Increased miner profitability per BTC (bitcoin) mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher."
Standard Chartered is an active crypto investor and offers crypto custody services. Its bullish position on Bitcoin follows other finance institutional investors, such as BlackRock, which has filed for a spot Bitcoin exchange-traded fund. This trend toward digital asset adoption among finance giants has spurred a generally pro-crypto conversation among mainstream and specialist financial media.
Bitcoin's price has made 84% gains year-to-date, almost doubling in value since the start of 2023. Standard Chartered's forecast assumes that this positive momentum will contribute to the growth of the crypto industry sector, which, in turn, helps to uplift the value of BTC. Its thesis is supported by recent data from on-chain analytics company Glassnode, which reveals a trend of BTC shifting from short-term accounts to long-term holders, which is historically an indicator of an upcoming bull market.
Chinese president pushes CBDCs at summit
Last week, China state broadcaster Xinhua News Agency published a transcript of President Xi Jinping's address to the 2023 Shanghai Cooperation Organisation (SCO) Summit. The summit, which was established by China and Russia in 2001, brings together regional interests to discuss economic, political and security cooperation.
During the speech, President Xi covered several talking points, including the onboarding of Iran as an SCO member. Still, one particular highlight was the Chinese leader's hyping up of central bank digital currencies (CBDCs) and his vision for the role they will play in the region. Specifically, China urged greater cooperation in the development and use of sovereign digital currencies among SCO members and proposed setting up development banks in participating nations.
Although China has not been friendly to Bitcoin and other decentralised digital assets, the nation leads the way when it comes to CBDCs. A 2023 report by the People's Bank of China revealed that there were 13.61 billion digital yuan CBDCs in circulation. This year, the digital yuan has been incorporated into China's Belt and Road Initiative, as well as day-to-day payments for things like public transportation. A SIM card that uses the digital yuan is also slated to become available to Chinese consumers in the near future. Interestingly, because the CBDC digital wallet is integrated into the physical SIM card, users will be able to top up their phones or pay bills via a point-of-sale machine, even if their phone is out of battery. The digital yuan even has a presence outside of China, as Singapore-based bank DBS allows Chinese businesses to receive payments in the CBDC.
It's clear that China is throwing serious institutional support behind the adoption of the digital yuan, even as it takes a harder line on other digital assets. The recent tightening of regulations concerning the licensing of cryptocurrency businesses in Hong Kong has seen many companies migrate their teams to Malaysia, where cheaper rents, the availability of local IT specialists and infrastructure, and lower living costs have established the country as a Southeast Asian rival to Hong Kong.
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