In a bullish prediction, Standard Chartered forecasts Bitcoin's value to potentially hit $50,000 this year and rocket to $120,000 by 2024. Analysts cite improved miner profitability and reduced coin selling as key drivers, contributing to a shrinking BTC supply and consequent price boost.

Back in April, Standard Chartered had already published a forecast of $100,000 for Bitcoin by the end of 2024, indicating their belief that the "crypto winter" was indeed over. However, one of the bank's top analysts in foreign exchange, Geoff Kendrick, now suggests there is an additional 20% potential for an "upside" to that projection.

Kendrick elaborated on the factors contributing to this positive outlook, stating that increased miner profitability per BTC (Bitcoin) mined means they can sell less while maintaining cash inflows, reducing net BTC supply and pushing BTC prices higher. This insight highlights how miners are now able to reduce the number of Bitcoins sold daily due to improved profitability, which subsequently contributes to a decrease in the overall market supply and consequently drives the value of Bitcoin upwards.

Despite Bitcoin experiencing an impressive 80% surge since the beginning of this year, its current price level hovers just above $30,200, which is less than half of its peak value of $69,000 achieved in November 2021. The crypto sector faced significant setbacks in 2022, with trillions of dollars being wiped away due to factors such as central bank interest rate hikes and the downfall of several cryptocurrency firms. However, the collapse of traditional-style banks this year has served as a catalyst for the sector's revival.

Standard Chartered maintains that its projected price rise is warranted by the fact that miners, responsible for generating approximately 900 new Bitcoins per day worldwide, will need to sell fewer coins in order to cover their costs, primarily electricity expenses powering sophisticated computing systems. Kendrick approximates that miners have recently been fully selling their newly minted coins, but if the predicted price of $50,000 is reached, they may only need to sell 20-30% of their daily production.

This reduction in selling volume would equate to a supply reduction from 328,500 Bitcoins per year to a range of 65,700-98,550 Bitcoins per year, significantly impacting the net BTC supply.

Moreover, by April or May, the total number of Bitcoins available for mining each day is set to halve due to a programmed mechanism that gradually reduces supply to maintain its appeal.

It is worth noting that predictions of soaring valuations during Bitcoin's past rallies have been abundant. For instance, a Citi analyst proclaimed in November 2020 that Bitcoin could reach an astonishing $318,000 by the end of 2022. However, it concluded the last year at approximately $16,500, experiencing a decline of about 65%.

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