Standard Chartered believes their Bitcoin price target of $120K for Q2 2024 may be conservative, citing over $4B in net inflows for spot Bitcoin ETFs recently. With considerable institutional interest and anticipated filings, Bitcoin could reach these targets sooner than expected, with a year-end forecast of $200K still in play.
Standard Chartered has recently suggested that its price forecast for Bitcoin (BTC) in the second quarter, set at $120,000, could be understated. According to their analysis, there has been a significant surge in the inflow of investments into spot Bitcoin exchange-traded funds (ETFs), with these totals surpassing $4 billion in just the past three weeks after adjusting for hedge fund basis trades.
The inflow into U.S. spot Bitcoin ETFs reportedly reached $5.3 billion over the same period. Adjusting for hedge fund strategies that exploit discrepancies between the spot price and futures price, the actual net flow is about $4 billion. The basis trade strategy involves buying Bitcoin in the spot market while simultaneously selling it in the futures market to profit from price variations.
Moreover, companies are increasing their Bitcoin reserves significantly. For example, MicroStrategy has ramped up its holdings to 555,450 BTC, amounting to approximately 2.6% of Bitcoin’s capped supply at 21 million. If MicroStrategy’s plan to raise $84 billion to acquire more Bitcoin is realised, their portion could rise over 6%, as noted by Geoff Kendrick, head of digital assets research at Standard Chartered.
Institutional interest appears to be growing, with upcoming 13F filings expected to show more entries from larger investors. Notably, Abu Dhabi’s sovereign fund has investments in BlackRock’s Bitcoin ETF, and both the Swiss National Bank and Norges Bank have acknowledged their stake in MicroStrategy.
In a further sign of the shifting regulatory landscape, New Hampshire has just legislated a Strategic Bitcoin Reserve bill, making it the first U.S. state to do so. This move indicates a growing acceptance and alignment of policy towards Bitcoin.
Citing these indicators, Standard Chartered believes their $120,000 target for Q2 could be too conservative. Their forecast for Bitcoin’s price at the end of the year is a significantly ambitious $200,000. At the time of reporting, Bitcoin was trading around $101,000, suggesting that movement towards these targets may be much closer than anticipated.
