Standard Chartered Predicts Bitcoin to Reach IDR 3.1 Billion by the End of 2025

JAKARTA - Bitcoin, the most popular digital asset in the world, is predicted to still have the potential to experience an increase in price to reach a new high. This was stated by Geoff Kendrick, Head of FX Research at Standard Chartered, in his latest note released on Monday, January 8, 2024.

Kendrick predicts that Bitcoin could reach 200,000 US dollars (IDR 3.1 billion) by the end of 2025, if the US Securities and Exchange Commission (SEC) approves the spot Bitcoin Exchange-Traded Fund (ETF) product. ETFs are investment instruments that track the price of certain assets, such as stocks, bonds or crypto.

Not stopping there, Kendrick continued that a spot Bitcoin ETF would increase demand and reduce the supply of Bitcoin, thereby pushing prices up significantly. He said that a US spot Bitcoin ETF could attract inflows of between  437,000 US dollars (IDR 6.8 billion) and  100,000 US dollars (IDR 1.5 billion) by the end of 2024.

"We estimate that US spot ETFs will have a greater impact than futures ETFs, because they will require the purchase of physical Bitcoin, which will reduce the available supply in the market," said Kendrick, as quoted by CNBC.

Kendrick also compared the impact of spot Bitcoin ETFs with the historical impact of spot gold trading products on gold prices. He said that after the launch of SPDR Gold Shares in 2004, gold prices more than quadrupled in seven years.

"We think Bitcoin has the potential to follow gold's lead, if not faster, due to wider adoption and increased awareness [of bitcoin]," Kendrick said.

Apart from that, Kendrick also highlighted the dynamics of Bitcoin's limited supply, as many as 21 million coins, which makes it more rare and valuable. He noted that the percentage of Bitcoin's total circulating supply is at an all-time low, indicating that Bitcoin holders are likely holding onto their assets rather than selling them.

"We believe that this reflects the fact that Bitcoin is increasingly being accepted as an asset worth holding in an investment portfolio," Kendrick said.

The head of FX research at Standard Chartered added that the Bitcoin halving cycle, namely halving the number of new Bitcoins issued every four years, will also have a positive impact on Bitcoin prices. The last halving occurred in May 2020, and the next halving is expected to occur in 2024.

"We estimate that the halving will reduce the supply of Bitcoin available on the market by approximately 40% by 2024, which will increase upward pressure on the price," Kendrick said.

Currently, the price of Bitcoin is around 45,000 US dollars (IDR 700 million), an increase of around 10% since the beginning of the year. Bitcoin reached its record high (ATH) of  69,000 US dollars in November 2023, driven by interest from institutional and retail investors.