Standard Chartered’s Bitcoin Price Forecast

Geoffrey Kendrick, Standard Chartered’s global head of digital assets research, maintains a bold price target of $500,000 for Bitcoin (BTC) by 2028. His optimism is grounded in the increasing participation of institutional investors, particularly sovereign wealth and state pension funds.

Sovereign Wealth Funds Enter The Bitcoin Fray

A recent report from Standard Chartered highlights the rising interest from government-backed investment vehicles in Bitcoin. Kendrick points to Abu Dhabi’s announcement of a 4,700 BTC-equivalent investment in BlackRock’s iShares Bitcoin Trust (IBIT) as a significant indication of this trend.

> “While this is small for now, we would expect the size to increase over time and, indeed, for other sovereigns to also start buying,” Kendrick stated in a Tuesday report. He emphasizes that Abu Dhabi’s investment reflects a strategic shift and foreshadows broader adoption among other wealth funds aiming to diversify with BTC.

Kendrick’s analysis is further supported by Form 13F filings, which detail institutional managers’ quarterly reports to the US SEC. According to Q4 data, while hedge funds have traditionally led Bitcoin purchases, banks have begun increasing their positions since Q3 of the previous year.

He explained that Bitcoin’s market has evolved from retail investor dominance to hedge funds utilizing exchange-traded funds (ETFs), and now includes state investment managers and central banks as emerging players.

> “This gives us comfort to say that even if buying by Strategy… [formerly MicroStrategy] slows down dramatically, we think other buyers are waiting to step in,” Kendrick remarked.

He notes significant corporate holdings of private institutions like MicroStrategy, yet believes that large pools of patient capital can sustain the future Bitcoin supply, supporting prices in the long run.

Among the institutions Kendrick mentions are the State of Wisconsin Investment Board and the State of Michigan Department of the Treasury. He also highlights potential new entrants, including central banks.

In the report, Kendrick refers to the Czech National Bank, which is considering allocating up to 5% of its €140 billion reserves to Bitcoin, alongside the Swiss National Bank exploring similar possibilities. These shifts could enhance Bitcoin’s legitimacy as a valuable asset class, comparable to traditional investments.

> “As institutional access to bitcoin improves and volatility declines, we expect more portfolios to migrate towards their optimal level from an underweight Bitcoin starting point,” Kendrick concluded.

At press time, BTC was trading at $95,581.

Featured image created with DALL.E, chart from TradingView.com