Matrixport Predicts BTC to $50k in January
Matrixport expects Bitcoin to reach $50k in January, citing institutional demand, ETF approvals, and low supply as some of the factors that would drive the price.
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Matrixport Research has predicted Bitcoin to reach $50k in January after spending most of December consolidating on earlier gains. According to its Matrix on Target report, the flagship asset will have a great start to the year because its demand will increase. Per its earlier predictions, BTC will be around $125 by the end of 2024.
The report comes on a day when Bitcoin reaches $45k, putting to dust any doubts about the current bull run. According to the crypto firm, this year is starting with bullish sentiments, unlike last year, because future events suggest a potential rally. Therefore, institutional investors are expected to start buying as soon as the market opens.
“We expect an immediate rally that once again catches investors off-guard,” it wrote.
The firm also backs up its prediction with historical data pointing at the performance of Bitcoin during halving cycles and stocks during the US presidential election season. In the last 60 years, stocks have only been down two years during an election year.
ETF Approval Will Not Trigger Sell-off
Apart from institutional purchases, the firm also expects the upcoming approval of ETFs to drive BTC value. It predicted that the approval could come earlier than anticipated and disagreed with the opinion of what to expect after the approval.
Some experts believe the ETF approval could be a “sell the news event” that will trigger Bitcoin sell-offs. This is because several holders are already sitting on unrealized profits and might decide to dump after the ETF announcement to capitalize on the surge expected to follow.
However, Matrixport researchers don’t see that happening.
“Approval would legitimize Bitcoin as an asset class for institutional portfolios that could be used as collateral to buy other assets.”
Instead, the firm believes there is a risk of supply shortages with most of Bitcoin supply currently off exchanges—estimated inflows after ETF approvals are expected to be between $24 and $50 billion.
Given the reduced Bitcoin supply on exchanges supply and the likelihood of miners not selling their holdings, there might need to be more Bitcoin for investors to buy. Historically, miners limit supply during halving cycles, and one is set for April 2024.
Bitcoin Above $45k
Meanwhile, Bitcoin crossed the $45k threshold today to reach a new high in 21 months. The surge in value saw the asset reach $45,899 on CoinMarketCap before retreating. Most of the gain resulted from rumors that the ETF approval might come earlier than expected.
It highlights what could follow an approval, and traders on crypto Twitter were quick to point this out. Crypto investor Scott Melker noted that Bitcoin was trading as if the ETF had already been approved.
The surge in Bitcoin value, which increased by more than 7% today, has a major impact on the futures market. Per Coinglass data, It resulted in a $207 million liquidation, of which $94.4 million was Bitcoin positions.
Short traders were particularly caught off guard as they accounted for $76 million of the liquidated positions. The largest liquidation was BTCUSDT order on Binance valued at $10.16M.
