The bitcoin price could rise to $50,000 by the end of the year, which could pave the way for it to double by the end of 2024, according to Standard Chartered. Bitcoin has struggled to move significantly above the $30,000 level this year, but US macroeconomic and regulatory headwinds aren’t the only things holding the price back: miner profitability has fallen with the price. , and miners dumping their bitcoin holdings to raise cash are limiting the upside potential of cryptocurrencies. “In Q1 2023 (latest complete data set), the 12 largest listed miners, representing 20% ​​of all global BTC mining, sold 106% of the BTC mined (reserves allowed). rose above 100%). We estimate this was slightly below 100% for the second quarter,” Geoff Kendrick, head of digital asset research at Standard Chartered, wrote in a note Monday. “However, if the BTC price rises to around $50,000, which we expect by the end of 2023, the share of new mine sales should drop by 20-30%. That’s a net annual reduction in the sale of BTC 250,000, a large number relative to the turnover of the bitcoin market”. “We previously predicted that this driver would add $10,000 to the bitcoin price,” he added. “We now believe this estimate is too conservative and therefore view our end-2024 target of around $100,000 upside.” BTC.CM= YTD mountain Bitcoin (BTC) this year Miners decide how much of the new bitcoin supply (900 bitcoins per day) reaches the market, depending on their profitability. If they are more profitable per bitcoin mined, they can sell less while keeping the cash inflows. That helps reduce the supply of bitcoin and increases its price. Miners have three sources of cash: sell bitcoins, sell shares, or borrow. Selling bitcoin is the most likely option for miners wanting to raise cash due to relatively low share prices and high interest rates, making it unlikely they will borrow money. Kendrick’s analysis is based on estimates of cash costs per bitcoin mined, drawn from mining companies’ quarterly earnings statements. He also noted that there are other factors to consider, including electricity costs, the dominant driver of cash costs, and the prices of the mining machines themselves, which have declined due to oversupply but are likely to catch up with bitcoin prices, said. . — CNBC’s Michael Bloom contributed reporting.
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