Bitcoin Price Target: Using Gold as a Proxy Suggests BTC Will Settle Around US$200,000 by End-2025

Bitcoin could “overshoot” to a high of around US$250,000 ($334,411) in 2025 if exchange-traded fund (ETF) inflows continue apace, says Standard Chartered Bank

Standard Chartered Bank’s head of FX research, west and digital assets research Geoff Kendrick has raised his Bitcoin price forecast for end-2025 to around US$200,000 from US$150,000 previously.

The new projection is based on using gold as a proxy for the cryptocurrency to assess where Bitcoin prices might go based on exchange-traded flows.

Standard Chartered analysts have used three separate gold-based measures in their assessment of Bitcoin prices.

The bank’s analysts believe that both comparisons are still relevant and provide insights into how the Bitcoin price might develop.

Earlier for gold and more recently for Bitcoin, exchange-traded products (ETPs) and ETFs allowed a new set of investors to gain access to a market that was previously underinvested, Kendrick says.

In gold’s case, it took several years for the ETP market to mature, during which time the gold price rose 4.3x.

In the instance of Bitcoin, Kendrick predicts that the ETF market will mature much faster — in one to two years — but result in the same price multiple, forming the basis for his estimated price level of US$200,000 at end-2025.

Secondly, using gold in the context of an optimised gold-Bitcoin two-asset portfolio also suggests a level around US$190,000, based on an optimised 80% gold and 20% Bitcoin portfolio at current gold prices.

Finally, a linear extrapolation of the correlation between ETF inflows and the Bitcoin price suggests a Bitcoin price level around US$250,000 assuming that total ETF inflows, until the market matures, are around Kendrick’s mid-point estimate of US$75 billion.

“This suggests to us that US$200,000 is the ‘correct’ end-2025 price level for BTC, in line with our previous price estimate, and that it is likely to be the new midpoint for a sideways trading range at that time,” he says.

“However, if ETF inflows reach our mid-point estimate of US$75 billion, and/or if reserve managers buy BTC, we see a good chance of an overshoot to the US$250,000 level at some stage in 2025,” adds the analyst.

For end-2024, Kendrick has raised his long-held price estimate to the US$150,000 level from US$100,000 given the more rapid pass-through from ETF inflows to the BTC price to date.

See Also:Binance CEO Teng sees Bitcoin topping US$80,000 on ETF flowsBitcoin retreats after setting fifth record high in seven daysAll that glitters is not crypto

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