This Will Be Bitcoin’s Highest Price in 2024, According to Matrixport
Bitcoin reached its highest point in almost 21 months, surpassing $45,800, as the ongoing crypto rally extends into 2024. A new report suggests that the flagship asset is set for more gains in the coming weeks, with several catalysts in play.
Matrixport’s latest analysis suggests the potential approval of a spot Bitcoin ETF, which could be approved sometime this week, defying the expectations of most traders who anticipated a positive announcement on January 8, 9, or 10.
If this scenario materializes, the crypto financial services platform anticipates a significant uptick in Bitcoin prices. Contrary to the typical ‘sell-the-news’ reaction, approval would establish Bitcoin as a legitimate asset class for institutional portfolios, potentially serving as collateral for the acquisition of other assets.
Instead, the risk lies on the upside, as the report highlights that $5-10 billion in fiat money may struggle to find sufficient Bitcoin on exchanges for exposure in ETFs. Following the 2022 bankruptcies and the implosions of the FTX crypto exchange, many Bitcoin holders have moved their BTC off exchanges, and the popularity of cold-storage options has grown.
Bitcoin’s Price Could Surprise Everybody
In addition to the massive excitement surrounding the year’s biggest news event, Bitcoin is also anticipating its halving, which is expected in April 2024. Matrixport said this could trigger a price move this year, which could “surprise everybody.”
The firm elaborated on the tendency of Bitcoin mining companies to restrict the supply during halving cycles, leading to a shortage in supply. This phenomenon is occasionally observed in commodity markets when a participant is compelled to buy, but sellers resist selling at the prevailing price levels. The outcome is a substantial surge in prices.
Matrixport pointed out that Bitcoin tends to rally strongly during the halving cycles, which coincide with the US election cycle.
Drawing on past data, the average return for Bitcoin in the years 2020, 2016, and 2012 stood at an impressive 192%. This historical trend could potentially propel the crypto asset towards Matrixport’s previous $125,000 target.
Drawing a parallel with US stocks, the report noted a similar pattern of strength during US election years. Remarkably, since 1960, there have been only two down years for US stocks during election cycles – 2008, when it saw a 37% decline, and 2000, when it witnessed a 9.1% decline over 60 years. This historical analysis suggests a potential alignment of bullish trends in both the crypto and traditional stock markets during specific election years.
Bitcoin Above $50k By January 2024
There have not been many minting activities at Tether increasing, signaling a lack of significant fiat-to-crypto inflows. Despite this, the ongoing rally in prices may indicate a scarcity of sellers in the market, leading to upward pressure on prices. Currently, the morning funding rate has reached a new peak at +66%, implying that long positions pay shorts an annualized rate of 66% to remain open.
As such, the futures market is exerting pressure on the spot one, creating conditions that could propel Bitcoin beyond the target level of $50,000 for January 2024, a goal that seems reasonably attainable.
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