According to Standard Chartered, the so-called crypto winter is over. As a result, one of the top cryptocurrency, Bitcoin, could reach a whopping value of US$ 100,000 by the end of 2024.
A while ago, the blockchain project Terraform Labs and its TerraUSD, and Luna coins had collapsed, leading investors, and traders to believe that the cryptosphere is facing what they called as ‘crypto winter’, a period of prolonged price declines across a vast array of cryptocurrencies.
Now, the value of the cryptocurrency is gradually increasing following the recent fall of Silicon Valley Bank, as crypto traders anticipate a potential pause in federal interest rate hikes. Meanwhile, the ongoing strength in tech stocks, and growth companies has also helped propel Bitcoin back to its glory.
Market optimism as well as liquidations also helped push Bitcoin to go past the US$ 30,000 mark, and gained more than 6% in the last 24 hours. On the other hand, Ethereum, the world’s second largest crypto by market cap, only gained a 3% increase in the last 24 hours, pushing its value toward US$ 1,900 in one week.
According to Geoff Kendrick, the Head of Standard Chartered’s digital assets research, there are several factors that caused speculations on the rise of Bitcoin. Among those factors are the recent turmoil in the banking sector, a stabilization of risk assets as the Fed is ending its rate-hiking cycle, and the improvement in crypto mining profitability.
The Fed recently raised interest rates by a quarter of a percentage to 4.75% to 5% on March 2023, which was the highest since 2007.
“While sources of uncertainty remain, we think the pathway to the US$ 100,000 level is becoming clearer,” said Kendrick.
As per April, Bitcoin has rallied to increase above US$ 30,000 in value for the first time in the last 10 months. The rise in value represents a partial recovery after trillions of dollars were wiped from the crypto market in 2022, interest rates carried out by central banks, and a string of crypto firms collapse. With the improving price of cryptocurrencies across the board, many crypto enthusiasts believed that the crypto winter might be over.
However, the predictions of these valuations are considered commonplace during the last bitcoin rallies. On November 2020 Citi analyst even stated that Bitcoin could reach as high as US$ 318,000 by the end of 2022.Â
On the other hand, this might be a sign of what investors called a ‘dead cat bounce’, an occurrence where prices temporarily rebound after a long period of negative trend, only to continue to fall afterward. While, the rebound can provide a welcome reprieve, the reality might be different from a number of factors such as geopolitical climate, economic indicators, and the Fed’s relationship to interest rates. Also, predicting the short-term price of digital assets is near to impossible.
