Matrixport, a prominent crypto financial services firm, released a report on 29 November 2023, providing an in-depth analysis of the sustainability of Bitcoin’s bull market into 2024. The report offers a bullish outlook, setting ambitious price targets for Bitcoin and delving into various factors that could influence its trajectory.
Matrixport has reaffirmed its bullish stance on Bitcoin, projecting a price of $63,140 by April 2024 and an impressive $125,000 by the end of the year. These projections are based on a comprehensive analysis of Bitcoin’s historical performance, current market trends, and broader macroeconomic factors.
The report contextualizes the ongoing fifth Bitcoin bull market by examining geopolitical, monetary, and macroeconomic implications. It draws parallels between past and current market cycles, suggesting a continuation of the bull market trend.
Matrixport’s analysis highlights the cyclical nature of Bitcoin’s market movements. They say that the bear market of 2014, which saw a 58% decline, was followed by three years of a bull market. Similarly, they point out that the 2018 bear market, with a 72% drop, preceded another three-year bull run. Following the 2022 bear market, which experienced a 65% decline, Matrixport suggests that a similar three-year bull market is underway, with 2023 marking the first year and an anticipated increase of 123%.
The report also examines the impact of Bitcoin halving events on its price, highlighting the fact that these events have been bullish for Bitcoin, with significant price increases observed in 2012 (+186%), 2016 (+126%), and 2020 (+297%). They also mention that the miners’ tendency to hoard Bitcoin before each halving has historically led to a price increase of around 200%, supporting the projection of Bitcoin reaching $125,000.
Matrixport’s inflation model predicts a continued robust tailwind for cryptocurrencies. The report anticipates another decline in inflation, leading the Federal Reserve to likely initiate interest rate cuts. According to Matrixport, these macroeconomic conditions, combined with geopolitical crosscurrents, are expected to provide a healthy dose of monetary support, propelling Bitcoin to new highs in 2024.
Last month, Markus Thielen, who leads research and strategy at Matrixport, suggested that Bitcoin’s performance throughout the year could be a key indicator of its position at year-end.
Omkar Godbole, writing for CoinDesk, reported that Thielen pointed out a pattern in Bitcoin’s historical performance. Specifically, when Bitcoin experiences a surge of at least 100% within a year, it typically has a 71% chance, or five out of seven likelihood, of further climbing by the year’s end, often adding an average increase of 65%.
In a note to clients on November 2, as reported by CoinDesk, Thielen stated, “If bitcoin is up at least +100% by this time of the year, then there is a +71% chance or five in seven that bitcoin would finish the year higher with average year-end rallies of +65% … As bitcoin tends to reach its peak by December 18th, we could call the six to seven weeks from early November to mid-December Bitcoin’s Santa Claus Rally.”
AllianceBernstein Holding L.P., commonly known as Bernstein, is a global investment management firm serving a diverse clientele, including institutional investors, high-net-worth individuals, and retail investors. Based in Nashville, Tennessee, Bernstein operates offices worldwide.
On October 31, CNBC covered Bernstein’s forecast that Bitcoin’s value could soar to $150,000 by 2025. This projection hinges on the U.S. Securities and Exchange Commission (SEC) approving a spot Bitcoin ETF by early 2024, a scenario Bernstein considers increasingly probable.
Bernstein’s optimistic outlook suggests a potential 280% increase from Bitcoin’s current price of around $39,500 and a 123% rise from its peak of more than $67,000 in November 2021. The firm believes that SEC approval of a spot Bitcoin ETF could result in up to 10% of Bitcoin’s circulating supply being incorporated into ETFs. This would offer a more direct investment route compared to Grayscale’s Bitcoin Trust, which currently holds about 3% of Bitcoin in circulation.
Gautam Chhugani from Bernstein emphasized the importance of the timing for a spot Bitcoin ETF approval. He recommends a neutral approach to Bitcoin, viewing it as a commodity suitable for ETF inclusion. His comments were part of a broader analysis that also involved initiating reviews of various Bitcoin mining companies.
Additionally, the analysis takes into account the upcoming Bitcoin halving event in April 2024, which will halve mining rewards as per Bitcoin’s protocol. Chhugani expects this event to eliminate less efficient mining operations, favoring the more formidable players in the market.
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