Standard Chartered Elevates Bitcoin Forecast to $150,000 Amid ETF Inflows

In a significant update to its financial forecasts, Standard Chartered Bank has revised its Bitcoin price prediction, setting a new target of $150,000 by the end of the year. 

This adjustment from the previously estimated $100,000 underscores the bank’s bullish outlook on the cryptocurrency, fueled by the strong performance of recently launched spot Bitcoin exchange-traded funds (ETFs) in the United States and Bitcoin’s positive price action among other factors.

Standard Chartered: A new era of Bitcoin investment

The revision of Bitcoin’s price target by Standard Chartered comes at a time when the cryptocurrency market is witnessing substantial inflows into spot Bitcoin ETFs, a development that signals growing investor confidence and interest in digital assets. According to a report released by the bank on Monday, led by analyst Geoffrey Kendrick, the year-to-date performance of Bitcoin has exceeded expectations, paving the way for its potential rise to the $150,000 mark by year-end.

The analysts highlight a noteworthy trend where the inflows into spot Bitcoin ETFs are outpacing the growth of open interest in Bitcoin derivatives. This trend suggests a shift towards more sustainable investment strategies in the cryptocurrency space, moving away from the speculative and often volatile derivative markets. The report emphasizes that the majority of these inflows are likely to represent long-term, “sticky pension-type flows,” indicating a significant portion of the investments are from entities with a long-term investment horizon, such as pension funds.

This shift towards more stable and long-term investments in Bitcoin is a positive sign for the cryptocurrency’s future, suggesting a maturation of the market and increased acceptance of Bitcoin as a legitimate asset class among institutional investors.

Bitcoin’s bright future

As Bitcoin’s current trading price hovers around $68,000, having briefly touched above $73,000 earlier in the month, the optimism surrounding its future valuation continues to grow. Standard Chartered’s report not only revises the immediate price target for Bitcoin but also maintains a bullish stance for the cryptocurrency’s performance in the coming years.

For the end of 2025, the bank continues to project a Bitcoin price target of $200,000. This long-term forecast is based on the analogy with gold, particularly focusing on the price movements of gold following the introduction of U.S. gold ETFs and an asset optimization analysis that suggests a portfolio composition of 80% gold and 20% Bitcoin. According to the analysts, for Bitcoin to achieve the 20% portfolio share indicated by their optimization analysis, its price would need to increase to $190,000, assuming the gold price remains unchanged.

However, the potential for Bitcoin’s price to exceed the $200,000 mark and possibly reach up to $250,000 at some point in 2025 is also discussed. This scenario is contingent upon the inflows from spot Bitcoin ETFs reaching the bank’s mid-point estimate of $75 billion or the initiation of Bitcoin purchases by forex reserve managers. The report points to the possibility of “sticky” cash pools from FX reserves acting as a significant catalyst for Bitcoin’s price increase, especially if large reserve managers begin to announce Bitcoin buying strategies in 2024.

Institutional interest and the path forward

The revised Bitcoin price target and the optimistic outlook for the cryptocurrency’s future reflect a growing institutional interest in digital assets. This interest is not only limited to speculative investments but extends to viewing Bitcoin as a valuable component of diversified investment portfolios. 

The potential involvement of forex reserve managers in the Bitcoin market could mark a significant milestone in the cryptocurrency’s journey towards mainstream acceptance and integration into the global financial system.

Conclusion

Standard Chartered Bank’s updated forecast, elevating Bitcoin’s price target to $150,000 by year-end and suggesting a potential rise to $250,000 by 2025, signifies a transformative outlook on cryptocurrency within the financial sector. This optimism is driven by robust investments in Bitcoin ETFs and a growing institutional embrace of Bitcoin as a credible asset.