Standard Chartered predicts Bitcoin to hit $120,000 next year! Bank of England Governor: Bitcoin lacks intrinsic value

A Standard Chartered Bank report pointed out that the increased profitability of miners and the halving of Bitcoin mining rewards are important factors affecting the rise in Bitcoin prices, both of which will limit supply and drive up prices. However, the Governor of the Bank of England maintains a reserved attitude towards Bitcoin and other cryptocurrencies, considering Bitcoin a speculative investment and leaning towards developing more stable and functional digital currencies.

Miners and Halving Are Key Factors Affecting Bitcoin Price

According to a report by Reuters, Standard Chartered Bank raised its price forecast for Bitcoin during 2024, suggesting that Bitcoin could reach $50,000 by the year-end and hit $120,000 within the next year. Previously, the bank had made a $100,000 prediction in April this year.

Standard Chartered analyst Geoff Kendrick explained that the increase in Bitcoin prices over the past six months will lead miners to sell less Bitcoin, thereby driving prices further upwards, creating a positive cycle. In other words, the improved profitability of miners is a potential driving factor for the price increase.

He also noted that the halving of Bitcoin mining rewards is expected to occur around April next year. With the anticipated reduction in supply, this is also expected to be a reason for the predicted price increase in the latter half of the year.

Kendrick told Reuters:

The crypto winter is over, and even though there were central bank rate hikes and a series of crypto company collapses, the closure of some traditional banks this year has fueled the market rebound.

On the other hand, Citibank's forecast two years ago fell short, as its analyst claimed in November 2020 that Bitcoin could rise to $318,000 by the end of 2022. However, as it turned out, Bitcoin hovered around $17,000 at the end of the year, a far cry from the prediction.

It is understandable that due to Bitcoin's crazy surge in just a few years of existence, Standard Chartered Bank has reasons for its sky-high valuation forecast.

Bank of England: Bitcoin is a Speculative Investment Product

However, according to Bank of England Governor Andrew Bailey's speech on "The Prospects for Money" yesterday, he does not seem to be very optimistic about Bitcoin and other cryptocurrencies.

He stated that neither Bitcoin nor stablecoins meet the safety currency standards expected by the financial system. Both have not passed the tests of currency singularity and settlement finality, hence they are not currencies.

Bitcoin has no intrinsic value and is highly volatile, so it should be viewed as a speculative investment. Stablecoins, often used as settlement bases, are not stable at all.

From the official speech transcript, Bailey leans towards developing enhanced or functional digital currencies like central bank digital currencies (CBDCs) featured on CNBC, rather than existing cryptocurrencies and stablecoins, while adding, "Cash will continue to exist."

Last week, the UK approved the Financial Services and Markets Bill as the primary regulatory body. The Financial Conduct Authority (FCA) has implemented various restrictions, including banning the promotion of crypto products, to regulate the current crypto financial market.