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Standard Chartered Bank has issued a warning regarding the potential decline of bitcoin’s price to the $50,000 range. The head of digital asset research at the bank cited a combination of factors contributing to this forecast.
Geoffrey Kendrick, leading the bank’s forex and digital assets research, expressed concerns about bitcoin’s recent drop below $60,000, signaling possible challenges ahead. He emphasized:
“The proper break below $60K has now reopened a route to the $50K-$52K range… The driver seems to be a combination of crypto-specific and broader macro factors.”
Kendrick highlighted specific issues within the crypto realm, including outflows from U.S. spot bitcoin exchange-traded funds (ETFs) and lackluster response to new spot bitcoin and ether ETFs in Hong Kong. He cautioned that over half of the spot ETF positions are underwater, increasing the risk of liquidation.
In addition to crypto-specific concerns, Kendrick pointed to broader macroeconomic trends affecting bitcoin’s price dynamics. He noted the tightening liquidity conditions in the U.S. since mid-April, which impact assets like cryptocurrencies that typically benefit from liquidity.
Kendrick stated: “Liquidity matters when it matters, but with strong U.S. inflation data and less likelihood of Fed rate cuts, it matters at the moment.”
Despite the short-term bearish outlook, Standard Chartered maintains its long-term bitcoin price projections. The bank raised its end-of-year forecast for 2024 to $150,000 and suggested a potential rise to $250,000 in 2025. These projections hinge on continued strong inflows into spot bitcoin ETFs and potential purchases by forex reserve managers.
Kendrick noted the timing of these predictions, stating: “It may take a little while now. But I think when we get closer to Trump election victory we can rally hard from say Sept. to year-end.”