Financial services giant Standard Chartered has predicted that the price of Bitcoin will reach $120,000 by the end of 2024. The price target is a revision of its previous forecast of $100,000 that the firm published in April.

“We now think this estimate is too conservative, and we therefore see upside to our end-2024 target,” stated the firm in a research report on Monday.

Geoff Kendrick, a senior foreign exchange analyst at the bank, attributed the increased optimism to increased miner profitability. Essentially, miners can sell less of their production and still maintain their cash inflows, which reduces the amount of Bitcoin sent to exchanges and its supply on the market. 

“The rationale here is that as well as maintaining the bitcoin ledger, miners play a key role in determining net supply of newly mined BTC,” said Kendrick.

According to his estimates, miners have recently been selling the entirety of their mined coins. However, if Bitcoin’s price hits the $50,000 mark, he foresees miners selling only 20% to 30% of their coins. 

“It is the equivalent of miners reducing the amount of bitcoins they sell per day to just 180-270 from 900 currently. Over a year, that would reduce miner selling from 328,500 to a range of 65,700-98,550 – a reduction in net BTC supply of roughly 250,000 bitcoins a year,” he said.

The amount of Bitcoin miners will be able to produce each day will be cut in half come March or April 2024, when the next halving event is set to take place. A halving event occurs every four years, reducing the rate at which new Bitcoin hits the market by cutting the reward for miners in half. 

This reduction in circulating supply, coupled with a potential spot Bitcoin ETF approval has market participants anticipating positive price action for the leading digital asset next year. At press time, Bitcoin was trading at $30,386, up 83% year-to-date.