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Matrixport bases its Bitcoin price rally anticipation on four important factors such as Bitcoin halving, ETF inflows, US elections, and Fed policy decisions with interest rate cuts.
In their latest report, financial services platform Matrixport stated that it expects Bitcoin price to touch $63,000 by March 2024 i.e. within a month from now. this would mean another 21% in BTC price which is already up 15.6% since the beginning of 2024. Matrixport points out four major catalysts that could fuel the BTC price action.
Bitcoin ETF Inflows
Ever since their launch last month, the spot Bitcoin ETFs have witnessed staggering inflows amid high institutional demand.
Earlier this week, the daily trading volume for spot Bitcoin ETFs surged to almost $2 billion, marking the highest level since trading commenced on January 11. As previously noted, spot Bitcoin ETFs experienced a significant influx of around $2.3 billion last week, nearly doubling the previous week’s inflow of $1.2 billion.
On Thursday, February 22, Bitcoin spot ETFs collectively experienced net inflows totaling $251 million. However, there were variations among specific ETFs: Grayscale ETF GBTC recorded a net outflow of $55.67 million for the day, while Fidelity ETF FBTC observed a net inflow of $158 million, contributing to a historical net inflow of $4.05 billion. BlackRock ETF IBIT noted a single-day net inflow of $125 million, with its total historical net inflow reaching $5.74 billion, as per data from SoSoValue.
Bitcoin Halving
While Bitcoin ETFs have been here for almost a month now, Bitcoin bulls are putting greater focus on the upcoming halving scheduled in April 2024. The upcoming Bitcoin halving will cut down the block rewards into half, from the existing 6.5 BTC per block to 3.25 BTC per block.
This will further increase the demand/supply ratio and widen the gap, providing a boost to the Bitcoin price. According to Willy Woo, the Bitcoin network is currently witnessing an influx of approximately $607 million per day in new investor demand. This demand contrasts starkly with the relatively modest $46 million per day in new supply from newly mined coins. This clearly shows that the Bitcoin demand is 13 times more than the supply, which will only increase further after the halving.
The #Bitcoin network is receiving an average of $607m per day of new investor demand** while this is being met by $46m per day of new supply in the form of new coins being mined.
We are now 60 days away from seeing new supply being halved. 🚀 pic.twitter.com/oZGkrXeFt0
— Willy Woo (@woonomic) February 23, 2024
Interest Rate Cuts
Moving forward in the report, Matrixport underscores the pivotal significance of the Federal Reserve’s stance on interest rates. Should there be a potential interest rate reduction, it might stimulate demand for higher-risk assets, potentially leading to an upsurge in cryptocurrency prices.
The global investors’ community has been awaiting the Fed’s call for rate cuts. However, looking at the pertaining inflation situation, the rate cuts are unlikely to happen during the first half of the year. While the US indices have been roaring on Wall Street, with the S&P 500 hitting its all-time highs, we can’t completely rule out the chances of a US recession.
US Presidential Elections 2024
Finally, the approaching US Presidential Elections 2024 and the accompanying policy uncertainties introduce a layer of complexity to Matrixport’s analysis. The intricate interplay between political developments and cryptocurrency markets complicates the ability to make definitive forecasts regarding Bitcoin’s trajectory.
Matrixport reports that February remains a good period for Bitcoin investments, based on the ten-year charts. Historically, February has seen an average profitability of 8% for Bitcoin in seven out of ten instances.
