OPUSD Optimism

Standard Chartered’s latest research notes offer a very bullish outlook for the major digital assets, Bitcoin (BTC) and Ethereum (ETH), by the end of 2024 and beyond. The bank’s analysts project Bitcoin could reach $150,000, while Ethereum could hit the $8,000 mark. These projections come amidst a backdrop of significant developments in the crypto space, including the launch of Bitcoin spot Exchange-Traded Funds (ETFs) and Ethereum’s recent Dencun upgrade. Bitcoin’s Path To $150,000 The bank’s research delves deep into the factors propelling Bitcoin’s potential surge to $150,000 by year-end. Central to this projection is the influence of Bitcoin spot ETFs, which, since their launch on January 11, have seen rapid inflows exceeding increases in open interest. Related Reading: Analyst Expects Bitcoin Price Correction To Persist, Targets $57,000 Support According to the bank, this suggests a more robust and sustainable positioning for Bitcoin, distinct from previous speculative peaks. “Rapid inflows to the new Bitcoin (BTC) spot ETFs have dominated […] Most of the inflows are likely to be sticky pension-type flows,” Geoff Kendrick and Suki Cooper elucidate, highlighting the newfound stability in Bitcoin investment trends. Three pivotal analyses form the cornerstone of Standard Chartered’s Bitcoin valuation: Gold Analogy: Drawing parallels with the gold market’s response to the introduction of US gold ETFs, the bank estimates Bitcoin could rise to the $200,000 level, marking a 4.3x increase from its pre-ETF price. Two-Asset Optimization: By optimizing a portfolio with 80% gold and 20% Bitcoin at current gold prices, the analysis suggests a Bitcoin level around $190,000. ETF Inflows Correlation: Linear extrapolation based on the correlation between ETF inflows and Bitcoin price points to a possible $250,000 level, assuming total ETF inflows around the bank’s midpoint estimate of $75 billion. Standard Chartered notes that these three measures suggest “that $200,000 is the ‘correct’ end-2025 price level for BTC, […] and that it is likely to be the new midpoint for a sideways trading range at that time.” Related Reading: Bernstein Analysts Convinced Bitcoin Is Headed For $150,000, Here’s Why Further the research notes that an “overshoot to $250,000 is likely at some point in 2025 if ETF inflows continue apace and/or reserve managers buy BTC.” Previously, the bank only predicted a Bitcoin price of $100,000 by the end of 2024. Ethereum’s Road To $8,000 Ethereum’s expected climb to $8,000 by the end of 2024 is anchored in two transformative developments: the Dencun upgrade and the expected approval of ETH spot ETFs. The recent Dencun upgrade, by significantly lowering transaction costs on layer 2 blockchains, enhances Ethereum’s competitive edge. “Ethereum (ETH) has just undergone the ‘Dencun’ upgrade, which dramatically lowers the cost of transactions […] making ETH more competitive,” the research notes. The forecast also hinges on the anticipation of US SEC approval for ETH ETFs by May 23, a decision poised to catalyze substantial inflows into Ethereum. Drawing from the Bitcoin ETF experience, Standard Chartered expects similar enthusiasm for Ethereum, with projected inflows of 2.39-9.15 million ETH (equivalent to roughly $15-45 billion). This substantial capital infusion is seen as a crucial lever for Ethereum’s price surge. “We expect significant ETF-driven inflows to ETH […] This could drive ETH to the $8,000 level by end-2024,” the bank elaborates, underscoring the parallel potential for growth akin to Bitcoin’s trajectory. The Prognosis For 2025 And Beyond Looking further ahead, Standard Chartered ventures into the terrain of 2025 predictions, where the bank sees the ETH-to-BTC price ratio ascending back to the 7% level, a hallmark of the 2021-22 period. This adjustment forecasts an Ethereum price of $14,000 by the end of 2025, given the projected Bitcoin level of $200,000. Such a scenario underscores the bank’s optimism about the enduring value proposition and growth potential of these leading digital assets in the medium term. At press time, BTC traded at $68,401. Featured image created with DALL·E, chart from TradingView.com