Geoff Kendrick of Standard Chartered anticipates a significant rise in Bitcoin’s value, potentially reaching $250,000 by 2025. This optimistic forecast hinges on the sustained success of spot Exchange-Traded Funds (ETFs) and an increasing interest among reserve managers in incorporating digital assets into their portfolios.
Bitcoin’s Path to $250,000
Kendrick suggests that Bitcoin could exceed his earlier $200,000 projection for 2025 before stabilizing around that figure. This surge is expected to be fueled by robust fund inflows and additional support from foreign exchange (FX) reserves, potentially starting in 2024. Recent US and EU sanctions on Russia’s reserves have heightened the attractiveness of non-standard reserve assets, with gold, the Chinese yuan (CNY), and potentially digital assets like Bitcoin standing to gain the most.
For 2024, Kendrick has revised his Bitcoin prediction to $150,000, up from an initial $100,000, following a more rapid gain than anticipated this year. The cryptocurrency’s value has soared by up to 73% year-to-date, peaking at a record $73,000 following the approval of spot ETFs earlier in January.
The Role of Spot ETFs and Reserve Interest
The introduction of spot ETFs has been a key factor in opening up cryptocurrency investments to a broader audience, with net inflows into Bitcoin now being a major driver of its price. Furthermore, Bitcoin’s upcoming halving event in April, which reduces the reward for mining new coins, is expected to bolster this effect by increasing the ratio of ETF buying to new supply.
Gold vs. Bitcoin Portfolio Optimization
Kendrick also delves into the gold-versus-Bitcoin portfolio optimization, suggesting an ideal allocation of 80% to gold and 20% to Bitcoin. However, the current allocation is more skewed towards gold at 91% versus Bitcoin’s 9%. To align with the optimal distribution, the Bitcoin price would need to climb to around $190,000, assuming gold’s price remains constant.
Ethereum’s Prospects
In addition to Bitcoin, Kendrick is bullish on Ethereum’s future, citing its latest upgrade that significantly reduced transaction costs. He anticipates Ethereum could also see a surge following its own spot ETF approval, potentially by the SEC in May. Drawing parallels with Bitcoin’s growth trajectory, he forecasts Ethereum could reach up to $8,000 by the end of 2024 and $14,000 by 2025.
| Cryptocurrency | 2024 Forecast | 2025 Forecast |
|---|---|---|
| Bitcoin (BTC) | $150,000 | $250,000 |
| Ethereum (ETH) | $8,000 | $14,000 |
Kendrick’s analysis presents a compelling case for the continued growth of major cryptocurrencies, supported by the proliferation of spot ETFs and the evolving stance of reserve managers towards digital assets. As the crypto market prepares for these developments, investors and enthusiasts alike will be watching closely to see how these predictions unfold, potentially setting the stage for a new era of digital asset valuation and investment.
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