- Geoffrey Kendrick sees bitcoin and ethereum hitting $100,000 and $10,000 this year, respectively.
- Standard Chartered’s head of crypto research thinks ethereum could one day hit $35,000.
- Kendrick also discussed two altcoins he believed were promising.
Cryptocurrencies look remarkably similar to technology stocks in the late 1990s, said Geoffrey Kendrick, the head of crypto research at Standard Chartered, the fifth-largest bank in the United Kingdom.
But that’s actually a good thing, Kendrick told Insider in a recent interview — even though he was well aware that the infamous tech bubble of 2000 eventually popped.
“I’m not using that because in 2000 tech blew up,” Kendrick told Insider. “But rather to say the size of the market, the development of the market, was similar.”
Kendrick continued: “We really haven’t seen the extreme price movement and participation that we saw in tech then. So I’m thinking more about the number of users. And there are very direct crossovers between the number of users of crypto assets, addresses, and the number of users of the internet in 1999. It actually stacks up in terms of share of global population almost exactly.”
A crypto boom that doesn’t end in a bust would be a welcome development for investors in the space after what’s been a dismal year so far for digital assets. Bitcoin and ethereum, the two largest tokens by market capitalization, are down 18% and 23% year to date, respectively. But Kendrick is focused on a longer timeline.
“If we fast-forward five or 10 years, there’s a very, very constructive backdrop here,” Kendrick said. “And the use cases in things like ethereum, for example, haven’t really even played out yet at all. So my backdrop is very, very positive.”
So positive, in fact, that Kendrick’s 2022 price targets for bitcoin and ethereum are $100,000 and $10,000, respectively — which implies upside of about 150% and 250% for those cryptos. Kendrick confirmed to Insider that in the long term, he still believed ethereum could rise more than tenfold to $35,000, a price target that Reuters first reported in September 2021.
“There’s been a number of market commentators that are saying that, like in previous bitcoin halving cycles, we’re now getting into the second half of that, and — in previous cycles — that has been a bearish signal,” Kendrick said. “I disagree with that logic.”
How bitcoin and ethereum will get to the moon
Standard Chartered’s head of crypto research is confident that bitcoin and ethereum “have very different drivers” than in previous trading cycles, which is why he thinks they’ll rebound this year.
Perhaps the most important catalyst for bitcoin and ethereum, Kendrick said, is that so-called smart money is flowing into the cryptos despite their massive drawdowns since last November. That wasn’t the case in the late 2010s, he said.
“Institutional money is coming and has continued to come despite the sell-off, which obviously, at its most aggressive, was more than 50% in bitcoin and ethereum,” Kendrick said. “So that, for me, says, ‘This time is different.'”
Bitcoin could reach the upper end of Kendrick’s price prediction if the token eventually became a globally recognized store of value that accounted for about 2% of the world’s assets, the research head said. But first, the crypto must continue to help bank the unbanked and grow into a “genuine peer-to-peer transaction solution,” Kendrick added.
Meanwhile, Kendrick said that ethereum should benefit from an upcoming network upgrade that experts have dubbed “the merge.” The event, which is set to reduce the number of new ether tokens that enter circulation, is critical for the crypto market and may lead to a wave of new investment, Kendrick said. After that, he said, ethereum may take the title of top token.
“I suspect that opens up the medium-term possibility of ethereum’s valuation overtaking bitcoin,” Kendrick said. “For that, you’d need to get — so my end-of-year targets are $100,000 and $10,000, which is a 10-to-1. You need to get to about 16% of price, which I suspect is where we go in 2023.”
2 ‘ethereum killers’ to watch
Besides bitcoin and ethereum, Kendrick said he had his eye on two altcoins in particular: polkadot (DOT) and avalanche (AVAX). Those two so-called “ethereum killers” are still worth considering as ethereum’s merge nears, Kendrick said, adding that investors may want to “be bullish on something which doesn’t do exactly what ethereum does.”
Polkadot, which is a multichain protocol that aims to connect different blockchains, is popular in part because it was founded by Gavin Wood, ethereum’s cocreator, Kendrick said. The crypto research head said he’s positive on parachains as the ethereum merge takes place.
“Polkadot probably stands out for me in terms of layer ones as a potential beneficiary medium term, given its sort of core use case of creating linkages between chains,” Kendrick said. “That’s probably, in terms of the top 10 or 20 in size of layer ones, would be my No. 1 choice.”
Avalanche got more of a cautious recommendation from Kendrick, given that it’s considered to be a direct competitor to ethereum. Still, he acknowledged that the two tokens didn’t have to be mutually exclusive, as a crypto investor could own both.
“I actually do quite like avalanche,” Kendrick said. “I suspect that it could — in terms of being a similar thing to ethereum — actually, avalanche I think can possibly do OK anyway. Let’s say post-ethereum merge, it’s sort of like a mini-me version.”