The latest episode of “The Market Report” features a discussion by Cointelegraph analyst and writer Marcel Pechman on Standard Chartered bank’s prediction of a $120,000 Bitcoin price based on the impact of the halving. The report suggests that a pre-halving rally will increase miner profitability and consequently “reduce the net BTC supply.”
However, Pechman disagrees with this thesis, citing the continued increase in mining difficulty and the news of Riot Platform’s investment in new ASIC equipment. In the past 12 months, mining difficulty has increased by 73%, while the price of Bitcoin (BTC) has only increased by 58%. Pechman argues that these factors make it unlikely for the net supply of BTC to decrease significantly.
Pechman also expresses skepticism about the possibility of Bitcoin reaching a price of $50,000 by the end of the year. He believes the odds of a spot Bitcoin exchange-traded fund (ETF) being approved by then are low. However, if the ETF does get approved within the next six months, it could potentially bring in an estimated $5 billion, pushing Bitcoin’s price above $70,000.
Looking ahead to 2024, Pechman increases his odds of a spot Bitcoin ETF approval to 30%, while Bloomberg analysts expect even higher chances at 50%. He suggests that if major players like BlackRock and Fidelity enter the market, a $10 billion inflow within the first few months of the ETF launch is feasible. This suggests that Standard Chartered’s prediction of a $120,000 Bitcoin price could be on the conservative side.
Discussing the potential impact of an ETF approval on the pre-halving rally, Pechman explains that investors may be anticipating the movement and adjusting their strategies accordingly. This could potentially affect the duration of the rally if investors decide to sell before the halving event takes place. Pechman advises traders to avoid succumbing to FOMO (fear of missing out) and instead employ strategies such as dollar-cost averaging or patiently waiting for an entry point.
In addition, Pechman analyzes the latest Glassnode on-chain analysis report on re-accumulation at $30,000. He notes that the concept of “return to mean” is not only prevalent in the Bitcoin market but also in traditional markets. When investors lack the conviction to push the price up, they tend to look at average levels from the past two or three years for guidance.
To delve deeper into Pechman’s strategy for the Bitcoin halving and the potential impact of a spot Bitcoin ETF approval, listeners can tune into “The Market Report” exclusively on the new Cointelegraph Markets & Research YouTube channel.
Overall, this episode of “The Market Report” offers insights into Standard Chartered’s bold Bitcoin price prediction, the prospects of a spot Bitcoin ETF approval, and the implications for the halving event. Pechman’s analysis provides valuable perspectives for both seasoned and novice investors in the cryptocurrency market.