How high can Bitcoin go in 2022? While there are lots of predictions out there on the direction it could go, Standard Chartered Bank analysts have provided one of the most comprehensive outlooks for the top crypto.
Analysts at Standard Chartered believe that Bitcoin has the capacity to peak at $100,000 within 2021 or in Q1 of 2022.
The bank analysts hold the view that structurally, Bitcoin is worth anywhere between $50,000 and $175,000. The analysts have also provided a basis for their valuation, and it’s broken down into three as below:
Bitcoin As A Medium Of Exchange
According to the analysts, Bitcoin has a huge potential as a medium of exchange. They hold the view that it has the potential to become the largest peer-to-peer means of payment for the unbanked populations of the world.
Bitcoin As A Store Of Value
The bank believes that Bitcoin already enjoys an edge as a store of value. Its advantage on this front comes from the fact that its supply increases at a very slow pace.
Bitcoin For Investment Portfolio Optimization
The analysts used the portfolio optimization peaks of 2017, when Bitcoin was trading at $20k for this analysis. Working forward from that, the bank expects Bitcoin and other cryptocurrencies to make up about 2% of total investment portfolios worldwide.
The bank analysts believe that a combination of these three factors could push Bitcoin to a valuation of anywhere between $50k and $175k.
The analysts also noted the impact that the block halving that happens every 4.5 years has on the network.
They noted that Bitcoin has in the past peaked 1.5 years after a block halving. Based on this past pattern, they expect Bitcoin to peak between the latter part of 2021 or within Q1 of 2022.
The projection is that it would only take a cyclical increase of 12x for Bitcoin to hit a valuation of $100k or more. This is relatively small compared to the halving of 2016 when it rose 28X and the halving of 2012 when it recorded a 93x growth.
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Besides Bitcoin, the standard chartered analysts have also given their projections for Ethereum.
Based on their structural valuations, analysts at Standard Chartered believe that Ethereum is worth between $26,000 and $35,000. However, they think for Ethereum to achieve such a valuation, Bitcoin would need to be trading at over $175,000.
The bank adds that while this may seem high, it reflects the level of activity and complexity of Ethereum compared to Bitcoin.
Standard Chartered bank also took note of the high level of uncertainty in Ethereum’s development path. On this basis, it noted that while Ethereum has the potential to outperform Bitcoin in terms of absolute gains, it also presents a higher level of risk. It’s simply a case of higher risk, higher returns.
However, in the medium term, the bank believes Ethereum is a much better investment. It expects Ethereum’s cross-rate to double to 0.161.
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