Bitcoin will surge 115% from current levels to $100,000 either late this year or early next year, and could reach $175,000 in the long term, Standard Chartered’s cryptocurrency research team has forecast.
The bank’s team said it “structurally” values bitcoin between the range of $50,000 to $175,000. “Cyclically, we expect a peak around $100,000 in late 2021 or early 2022,” they said in a note Tuesday.
It also sees the current price of ethereum’s native token rising tenfold to between $26,000 to $35,000. No time period was specified for the price target.
That range “may appear high compared to the current ETH price, but we think the current price reflects both the relative complexity of ETH (versus BTC) and the uncertainty around ETH’s development,” StanChart’s Geoff Kendrick, Christopher Graham, and Melissa Chan said in the note.
“In other words, while potential returns may be greater for ETH than for BTC, risks are also higher,” they added.
For ether to hit that range, bitcoin would need to trade towards the upper end of its valuation range at $175,000, the StanChart team said.
Bitcoin was last trading around $46,160 on Wednesday, regaining some ground after Tuesday’s sell-off that came alongside El Salvador’s bumpy rollout of the cryptocurrency as legal tender. Ether consolidated losses at $3,387, according to data from CoinDesk.
“As a medium of exchange, BTC may become the dominant peer-to-peer payment method for the global unbanked in a future cashless world,” the StanChart team said.
The ethereum network, which underwent a major upgrade last month, offers smart contracts that promise to cut out middlemen in financial services. But other networks, such as cardano, are developing the capacity for smart contracts, which automatically execute a specified process once defined rules are met.
The Asia-focused bank’s team said they used credit-card company transactions and market valuations as a reference point for their analysis.
Using a “financial market versus currency” analogy, they looked at credit-card providers’ market capitalization versus potential transactions in the unbanked sector to arrive at their bitcoin price valuation. For ether, they said they compared the value of global banks against the value of global credit-card companies.
“Rather than being akin to a currency like bitcoin, (ethereum) is more akin to a financial market in which non-linear financial transactions such as lending, insurance and exchanges can operate,” they said.
