Bitcoin’s price could exceed $50,000 as early as the end of this week because of the prevailing bullish sentiments surrounding the market, according to a Jan. 2 note to investors by digital asset management firm Matrixport.
The anticipated approval for a spot Bitcoin exchange-traded fund (ETF) in the U.S., alongside the escalating rate of institutional investments in the industry plus the flagship digital asset’s dwindling supply levels, has positioned the market for a “robust beginning-of-the-year buying flow.” Bitcoin broke $45,000 for the first time in March 2022 during Asia trading hours on Jan. 2.
“Institutional investors cannot afford to miss out on any potential rally again and, therefore, have to buy immediately when the markets open for trading in 2024. We expect an immediate rally that once again catches investors off-guard,” Matrixport added.
With no sellers in the market and prices squeezing higher, the firm furthered that Bitcoin’s funding rate remained notably high throughout the December holiday period, indicating a bullish stance.
As of Jan. 2, BTC’s funding rate surged to 66%, signifying long traders paying shorts a 66% annual fee to maintain long positions. This metric will propel Bitcoin’s price upwards, possibly breaching the $50,000 mark this weekend or before the end of the month.
Spot BTC ETF to draw institutional investors
Matrixport also predicted a swift response from institutional investors if the Securities and Exchange Commission (SEC) were to approve an ETF before the anticipated Jan. 10 deadline.
According to the note, such approval will validate Bitcoin as a credible investment for institutional entities, consequently driving its value northward.
Nonetheless, Matrixport notes a probable scarcity of Bitcoin due to institutional influx, estimating that $5-10 billion in fiat might struggle to secure adequate assets from exchanges, partly due to the movement of Bitcoin to cold wallets after the 2022 crypto industry setbacks.
Halving, U.S. election to push BTC price higher
Beyond the spot Bitcoin ETF’s anticipated approval and the ensuing institutional exposure, Matrixport forecasts a bullish path for Bitcoin. Highlighting the scheduled Bitcoin Halving in April 2024 and the forthcoming U.S. election as additional catalysts likely to propel the asset’s value higher.
Matrixport predicts a potential surge to as high as $125,000 owing to Bitcoin’s halving, citing historical returns of over 192% during previous halving periods in 2012, 2016, and 2020.
Additionally, the firm highlights the trend of robust performance in U.S. stocks during election years, contributing to a favorable landscape for Bitcoin’s ascent. “Bitcoin price move this year could surprise everybody,” Matrixport stated.
Source: https://cryptoslate.com/bitcoin-price-could-hit-50000-by-weekend-matrixport-says/