Standard Chartered Bank has issued a warning that the price of bitcoin may decline to $50,000. The head of digital asset research at the bank attributed this prediction to a combination of factors specific to the cryptocurrency industry and broader macroeconomic influences. Furthermore, he cautioned about the risk of liquidation for certain spot exchange-traded fund (ETF) positions, noting that more than half of them are currently in a loss-making position.
Bitcoin’s Potential Drop to the $50K-$52K Range
Standard Chartered Bank believes that bitcoin’s recent drop below the $60,000 threshold could indicate the start of further challenges ahead. Geoffrey Kendrick, who leads the bank’s research on forex and digital assets, commented on Wednesday: “BTC’s decisive break below $60K has now opened up the possibility of a decline to the $50K-$52K range… The driving force behind this appears to be a combination of factors specific to the cryptocurrency industry and broader macroeconomic trends.”
Kendrick emphasized concerns specific to the cryptocurrency industry, such as consecutive days of outflows from U.S. spot bitcoin ETFs and a lukewarm response to the recent introduction of spot bitcoin and ether ETFs in Hong Kong. He warned: “More than half of the spot ETF positions are currently in a loss-making position, so the risk of liquidation for some of them must be considered.” Additionally, he attributed the recent decline in bitcoin’s price partially to the low trading volume of Hong Kong spot crypto ETFs.
The Standard Chartered analyst also highlighted that, apart from cryptocurrency-specific concerns, broader macroeconomic trends are exerting pressure on bitcoin’s price movements. He observed that liquidity measures have rapidly deteriorated, especially in the U.S., since mid-April. As a result, assets like cryptocurrencies, which typically benefit from liquidity, are feeling the effects of these tightening conditions.
Kendrick stated: “Liquidity certainly matters when it is needed, but against a backdrop of strong U.S. inflation data and a decreased likelihood of rate cuts by the Federal Reserve, it is a significant factor at the moment.” He continued: “Bitcoin could potentially return to the $50K-$52K range, or if the U.S. consumer price index on the 15th is favorable.”
Standard Chartered maintains its bitcoin price projections for the current and future years. The bank recently raised its end-of-year forecast for 2024 from $100,000 to $150,000, while also suggesting that bitcoin could potentially reach $250,000 in 2025, contingent upon continued strong inflows into spot bitcoin ETFs and potential purchases by forex reserve managers starting this year. When asked about the timing of his price prediction, Kendrick stated: “It may take some time now, but I believe we can witness a strong rally from September until the end of the year, as we get closer to a victory in the Trump election.”
What are your thoughts on Standard Chartered’s analyst’s caution about bitcoin’s price falling to $50,000? Let us know in the comments section below.
