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Bitcoin could soar 266% to $250,000 next year if ETF inflows stay strong, Standard Chartered says

Filip De Mott   

Bitcoin could soar 266% to $250,000 next year if ETF inflows stay strong, Standard Chartered says
  • Bitcoin could reach $250,000 in 2025, Standard Chartered's Geoff Kendrick predicted.
  • That's as long as spot ETF inflows remain strong, and reserve managers begin buying crypto.

Bitcoin could surge to as high as $250,000 in 2025, propelled by the success of spot ETFs and growing interest from reserve managers, Standard Chartered's Geoff Kendrick forecast in a note on Monday.

Bitcoin next year could overshoot the analysts's original prediction of $200,000 in 2025 before settling back down in a range around that level. Such a stellar rise is likely if fund inflows remain as strong as they are, the firm said. Meanwhile, support would also come from FX reserves, a source of cash that could enter the sector as soon as 2024, he said.

"We think US and EU sanctions on Russia's reserves have structurally increased the appeal of non-standard reserve assets for FX reserve managers," Kendrick wrote. "The most obvious beneficiaries of this are gold and the CNY, but digital assets could also benefit. If they do, we would expect the largest and most liquid assets – such as Bitcoin – to receive most of the inflows."

For 2024, Kendrick now expects bitcoin to reach $150,000, as sharper-than-expected gains so far this year have boosted his previous $100,000 estimate. The token has already climbed as much as 73% year-to-date, hitting a record high of $73,000 after January's spot ETF approval ignited a rally.

Kendrick's long argued that the funds would open crypto to a new group of investors, and now noted that net inflows have become bitcoin's largest driver and are likely to be sticky.

Also boosting the price forecast is bitcoin's April halving — a recurring event that diminishes the amount of bitcoin awarded to miners. At current levels, new ETF buying is worth around 2.5x of new supply, and should increase to 5x after April, he said.

Further support for the $200,000 outlook comes from gold-versus-bitcoin portfolio optimization, which suggests an 80%-20% split between the two assets. However, current optimization stands closer to 91% for gold to 9% for bitcoin.

"Assuming the gold price stays unchanged, the BTC price would need to increase to USD 190,000 in order for BTC's share to rise to the 20% indicated by our portfolio optimisation," Kendrick said.

In a separate note, Kendrick also projected higher upside for ethereum. Not only has ethereum's newest upgrade dramatically reduced its transaction costs, the coin is likely to benefit from its own spot ETF approval potentially coming from the SEC in May, he said.

Borrowing from bitcoin's trajectory, this could send ethereum up to $8,000 and $14,000 by year-end 2024 and 2025, Kendrick forecast.

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