Standard Chartered Bank admits its mistake! Bitcoin's year-end target price was lowered from 20K to 10K

Standard Chartered Bank lowered its target price for Bitcoin at the end of the year from $20 to $10, a 50% halving. The 2026 target was also lowered from $30 to $15. Geoff Kendrick, head of global digital asset research at Standard Chartered Bank, said that recent price action has forced the bank to recalibrate Bitcoin price expectations, with the core reason being that the buying behavior of the crypto asset bank (DAT) may have ended.

Why the $20M Prediction Completely Failed

! DAT stops buying Bitcoin

(Source: Bloomberg)

Standard Chartered’s year-end target of $20K released in June 2024 was once one of Wall Street’s most aggressive Bitcoin predictions. The logic at the time was built on two pillars: continued buying by the Digital Asset Reserve Corporation (DAT) and an influx of institutional funds from Bitcoin spot ETFs. Kendrick believed at the time that these two forces would propel Bitcoin to a new all-time high in 2025 and reach $20K by the end of the year.

However, the actual trend deviates significantly from the forecast. After hitting an all-time high of $126,273 on October 6, Bitcoin was trading just above $93,000 as of Tuesday, down nearly 26% from its high. This trend forces Standard Chartered Bank to face the harsh truth: its core assumptions have failed. Kendrick wrote in his latest report: “We believe that the buying behavior of the Bitcoin Digital Asset Reserve Company (DAT) may be over.”

Digital asset reserve companies refer to companies that include cryptocurrencies as reserve assets on their balance sheets, even if these companies have had little to do with cryptocurrencies in the past. The market is worried that if these companies start selling cryptocurrencies, it could trigger a crash in Bitcoin investment transactions that are popular this year. But Kendrick’s judgment is more nuanced: it’s not that DAT will sell, but that they’ve stopped buying.

Earlier this week, Michael Saylor’s Microstrategy Corporation (MSTR) disclosed that it had purchased about $1 billion more in Bitcoin last week, the company’s largest single acquisition since July. However, this purchase did not prevent Standard Chartered from lowering its forecast, as Kendrick focused not on the actions of individual companies but on the systemic woes of the DAT community as a whole.

Three Structural Evidence of DAT Model Collapse

Since November 2023, MicroStrategy’s stock price has fallen below the value of Bitcoin holdings, reversing the previous high premium. According to BitcoinTreasuries.net, the company’s stock price was trading at an 11% discount to the value of its Bitcoin holdings as of Tuesday. In 2020, the premium was as high as 700%. This transition from heaven to hell is the most direct evidence of the collapse of the DAT model.

Kendrick said that buying from digital asset reserve companies and Bitcoin ETFs has been the main force driving Bitcoin prices higher since 2024. But one of the sources of demand seems to be weakening. Like microstrategies, the stock prices of many other crypto asset reserve companies have also fallen below the value of their crypto assets. This makes it more difficult to rationalize further buying and lacks financial support due to financing difficulties.

Core Causes of DAT Mode Failure

Premium Collapse Financing Difficulties: Stock prices falling below NAV mean that issuing new shares dilutes existing shareholders’ equity, rendering traditional financing channels ineffective

Loss of Market Confidence: Investors are no longer willing to pay a premium for a simple “buy and hold” strategy, leading to increased competition leading to valuation compression

Liquidity Depletion: A 26% drop in Bitcoin prices has shrunk the company’s net assets, increasing debt financing costs and limiting limits

Standard Chartered’s chart shows that the overall market net asset value of Bitcoin reserve companies, that is, the ratio of the total market capitalization of such companies to the value of their Bitcoin holdings, has declined sharply since the beginning of the year. This data reveals a systemic problem: not just micro-strategies, but the entire DAT track is losing traction.

Kendrick noted that microstrategies are still unlikely to sell any Bitcoin. For smaller digital asset reserve companies, the most likely scenario is to hold steady rather than sell, and these companies are more likely to suspend or maintain their current Bitcoin holdings without actively reducing their holdings. This “stop buying, but not selling” state means that DAT has shifted from a demand driver to a neutral factor.

ETFs have become the only hope, but there are warning signs in the short term

Looking ahead, Kendrick believes that Bitcoin’s price action will be primarily driven by ETF fund flows. He anticipates continued inflows of ETF funds in the coming years, which will be supported by the widespread adoption of Bitcoin by institutions. However, short-term capital flows are more complex. As of last week, BlackRock’s iShares Bitcoin Trust (IBIT) has experienced net outflows for six consecutive weeks, the longest continuous net outflow since the fund’s inception in January 2024.

This data is very alarming. IBIT was once the star product of the Bitcoin ETF market, setting a record for the fastest-growing ETF in history in the early days of its launch. Six consecutive weeks of net outflows show that even the most successful Bitcoin ETFs are not immune to the current market weakness. According to CFRA Research, the fund has still achieved a cumulative net inflow of $254 billion so far this year, but if the recent outflow trend continues, it may erode this cumulative advantage.

Kendrick’s new forecast framework is as follows: $10M by the end of the year would only require a 7.5% increase based on the current price of around $93,000, which is a relatively conservative and achievable target. The $15M at the end of 2026 represents an increase of about 61% from current prices, which requires a recovery in ETF inflows and accelerated institutional adoption. The long-term target of $50M by 2030 remains unchanged, indicating that Kendrick remains confident in Bitcoin’s long-term value proposition.

The significant downward revision of the short-term target reflects Standard Chartered’s reassessment of market drivers. When DAT buying disappears and ETFs flow out in the short term, the structural forces supporting Bitcoin’s price weaken significantly. This honest forecast adjustment, while potentially damaging the bank’s forecasting reputation, also demonstrates the realistic attitude of professional institutions.