The price of Bitcoin BTC/USD could soar above $120,000 if miners continue to hold onto tokens, according to Standard Chartered analyst Geoff Kendrick, Business Insider reports.
What Happened: Kendrick suggests that the behavior of Bitcoin miners, who often sell fewer tokens when the price climbs, could create a positive feedback loop that propels Bitcoin’s price beyond already-bullish forecasts.
“And so your point about this becoming self-fulfilling, I suspect is actually a very important driver,” he said.
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Why It Matters: The upcoming halving of Bitcoin in 2024, which will cut the reward given to miners in half, is another factor that could lead to price increases. Kendrick also pointed out that miners do not have many reasons apart from Bitcoin’s price moves to sell the token. Many miners hold on to their bitcoin with the hope that its valuation will eventually climb up.
“So they basically want to have a company that starts out when prices are cheap, get cheaper electricity and stuff, and then hold on. It’s like a super-leveraged play,” he explained.
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