Some investors expect Bitcoin$BTC to break out of its consolidation phase and reach new record highs in the second half of the year.
Behind this optimistic expectation are the acceleration of corporate treasury purchases, strong cash inflows into exchange-traded funds (ETFs), and cryptocurrency legislation advancing in the US Congress.
Bitcoin rose nearly 30% in the second quarter, but the period has been labeled “consolidation.” Bitcoin’s gains have diminished month-on-month after trading in a narrow price range for three months. The cryptocurrency gained 15% in the first half of the year, a more subdued performance compared to the 45% rise in the same period last year. But analysts say the real rise may be starting now.
Bitcoin, which had largely traded above $100,000 since May 9, was trading at $108,000 today, about 3% below the record of $111,999 reached in May.
Kendrick noted that some investors may be concerned about Bitcoin’s four-year cycle toward the end of September. Noting that previous cycles have seen prices fall about 18 months after each halving, Kendrick said institutional inflows could offset those effects this time around.
Bitcoin could reach $135,000 by the end of the third quarter and $200,000 by the end of the year, according to Standard Chartered’s estimate. “Once the market gets over these cyclical fears, we expect Bitcoin to continue its rise,” Kendrick said.