Matrixport Head of Research Markus Thielen claimed in his latest Market Overview report that even without a spot Bitcoin ETF approval by the U.S Securities and Exchange Commission (SEC), Bitcoin BTC/USD prices are likely to witness an increase.
What Happened: Thielen stated, “Even if the SEC still disapproves of Bitcoin Spot ETFs in January 2024, we will likely see higher crypto prices in 2024.”
He said crypto investors should keep an eye on Bitcoin's dominance chart daily. Any declining indicator of dominance will signal that an altcoin rally is happening soon.
Based on CoinMarketCap data, Bitcoin dominance currently stands at 52% in the global crypto market cap at $1.62 trillion. The total crypto market volume over the last 24 hours is $79.98 billion marking a 20.4% increase.
He went on to add that not only is 2024 a year of Bitcoin halving but also an election year in the U.S., the outcome of which could affect prices. On average, Bitcoin prices have increased by 192% in halving year. The halving is scheduled for April 2024.
In November 2023, Matrixport estimated BTC to surge to $56,000 by year-end while the firm’s October estimates stand at $42,000 for Bitcoin if the Tether market cap sees expansion by $24 billion.
Why It Matters: Thielen highlighted that crypto markets face difficulties in low liquidity environments such as in 2022 and they flourish on expectations of improving liquidity in the future, like it did in 2023.
Price Action: Bitcoin prices in the past month have surged 15% with year-to-date gains of 153%. Bitcoin peaked at 2023 highs of $45,000 in early December 2023.
In 2019, when the Fed stopped its hiking cycle and maintained interest rates at the same level for seven months, Bitcoin prices witnessed a significant 300% growth.
When the Fed previously finished its hiking cycle and kept interest rates at the same level for seven months in 2019, Bitcoin prices rose nearly +300%.
For 2024, the Fed forecasts three cuts or 75 basis points. This is still short of the 215-basis point gap between inflation and interest rates.
In 2022, Matrix On Target's inflation model estimated a sharp drop from 8% to 3%-4% by the end of 2023 which gave investors confidence for a significant rally in 2023 for the risk assets, stocks, and crypto.
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