In a recent investor note, Matrixport, a renowned crypto financial services platform and prime broker for institutions, has made an intriguing prediction about Bitcoin's future price.
According to the firm, Bitcoin could see a powerful surge and potentially reach $50,000 by the week’s end.
Meanwhile, this article explores Matrixport's insights, shedding light on the factors driving this optimistic outlook.
Matrixport's analysis, released on January 2, 2023, under the title "Explosive Bitcoin Surge to $50,000 Looms Large in January," highlights the favorable conditions that could pave the way for a strong beginning in 2024.
The report highlights Bitcoin's consolidation towards the end of last year, signaling a potential breakout.
Moreover, MatrixPort notes that Bitcoin appears poised for a robust buying flow at the beginning of the year after the usual mid-to-end December consolidation.
Institutional Investor Sentiment
One crucial factor contributing to this projected rally is the shift in sentiment among institutional investors.
In contrast to the bearish outlook of the past year, the current market dynamics have created a situation where institutional investors, wary of missing out on potential gains, are expected to make significant investments as soon as the markets open in 2024.
Matrixport underscores that institutional investors cannot afford to miss out on potential rallies anymore, leading to an immediate buying spree once the trading gates open (bull run).
The eagerly anticipated approval of a spot Bitcoin ETF has the potential to serve as a catalyst for a surge in the cryptocurrency market.
Once approved, this ETF will provide new opportunities for institutions and retail investors to participate in the growing ecosystem.
John Palmer, President of CBOE Digital, believes this opens avenues for pension funds and RIA-based funds to invest in Bitcoin and its native spot token, ultimately increasing accessibility and adoption within the institutional realm.
Matrixport, a leading cryptocurrency platform, predicts that the approval of a Bitcoin Spot ETF may come earlier than initially expected, potentially before January 8, 2024.
This approval will not only legitimize Bitcoin as an asset class for institutional portfolios, but it could also drive a significant surge in its price.
Additionally, Matrixport notes the decreasing availability of Bitcoin on exchanges, with approximately 70% of outstanding Bitcoins remaining dormant for the past year. This scarcity could further fuel a potential price increase.
At press time, Bitcoin is trading at about $43,090 after a previous weekly peak that saw it surge over the $47,000 mark.
Halving Cycle, Market Trends, and Historical Performance
Looking ahead, Matrixport references the upcoming halving cycle in April 2024 as a potential driver for a supply shortage and subsequent price spikes.
Drawing parallels with commodity markets, they highlight the possibility of forced buying and reluctant selling, leading to dramatic price increases.
The report also highlights Bitcoin's historically solid performance during previous halving cycles, which coincided with the US election cycle, indicating a potential pattern.
With an average return of +192% during 2020, 2016, and 2012, Matrixport sets a long-term target of $125,000 for BTC based on their 'one-year-new-high' indicator.
In its latest commentary, Matrixport delves into the ramifications of the present funding rate, which continues to exhibit a bullish undertone among crypto traders.
According to their report, the futures market is mounting upward pressure on the spot market price of Bitcoin, evident from the funding rate attaining a new pinnacle at +66%.
Matrixport concludes that this dynamic, fueled by the futures market, may potentially catapult Bitcoin beyond the $50,000 target milestone by January 2024, deeming it an attainable feat.