Matrixport analyst Markus Thielen believes that the price of Bitcoin in this market cycle could reach $125,000. This cycle is expected to continue until February or September next year. However, there is no narrative of an outbreak for altcoins at the moment.
Markus Thielen, known as Matrixport’s analyst, has gained wide recognition for his market analysis report, especially his accurate predictions on Bitcoin prices in recent months. He is also a researcher at 10X Research.
Markus’s Bitcoin reports have been highly accurate in predicting price movements in recent months. Even his analysis indicating a potential downturn for Bitcoin resulted in a market decline. However, Matrixport received criticism for manipulating the Bitcoin market, as they stated that the SEC would not approve any spot ETF in January, causing a temporary 20% drop in Bitcoin prices. Later, it was confirmed that the SEC did approve spot ETFs.
When Bitcoin crossed $65,000, approaching its previous high of $69,000, BlockBeats interviewed Markus to discuss his insights. The most important information he shared is that this exceptionally accurate analyst believes that Bitcoin could reach $125,000 this year. He also discussed the impact of ETFs and his market outlook.
BlockBeats: First, could you briefly share your experience and how you became a Bitcoin analyst at Matrixport?
Markus: Several years ago, I was the head of the quantitative and derivatives strategy department at Morgan Stanley, essentially becoming a portfolio manager, working for large banks and hedge funds. I also set up my own hedge fund in Hong Kong and served as the chief investment officer of a cryptocurrency asset management company. These experiences led me to Matrixport.
BlockBeats: So, you have been trading Bitcoin for many years?
Markus: Yes, I first became interested in Bitcoin in 2013. In 2015, we experimented with arbitrage trading on some trading platforms as a side business. But full-time trading started a few years ago. When the market capitalization became significant, Bitcoin truly became a macro asset. This is why we are able to make accurate predictions based on quantitative analysis, macro perspectives, and liquidity analysis, which form the foundation of the market and our forecasts.
BlockBeats: I see. Let’s talk about Bitcoin directly. Last November, you mentioned that Bitcoin could rise to $57,000. Has the current situation exceeded your expectations?
Markus: Firstly, in October 2022, we predicted that Bitcoin could reach $63,000 this March, entering the halving period. Our views and analysis are supported by data, and we don’t set price targets randomly. When we mentioned in November last year that Bitcoin could reach $57,000, it has indeed exceeded our expectations.
Around October 2022, about 15 months ago, we were already looking at the $60,000 level. But the reality is, when you see the previous cycle symmetry, you will find that the bull market has only completed half of its course. Once you understand how the previous bull market evolved, you won’t be surprised by Bitcoin’s 10% surge overnight. For example, based on our analysis this morning (February 29th), it is challenging to be bearish because it will continue to rise.
BlockBeats: Do you think this bull market has only completed half of its course?
Markus: Based on our data, it seems that we are only halfway through this bull market. This doesn’t mean that we will rise by 150% or 160%. But when you look at the previous cycles, I can show you a chart (see below) where if you bought before the halving 500 days ago, it was actually the bottom.
Then in the following 500 days, which is 18 months, it is the second stage of the rebound.
BlockBeats: I can’t imagine how high Bitcoin can go from here.
Markus: There are two pieces of data. We don’t casually throw out numbers. I don’t rely on feelings when trading. But in the past three U.S. presidential elections, which coincided with halving cycles, so in 2012, 2016, and 2020, Bitcoin’s average return rate in those years was 192%, and Bitcoin rose over 100% every year.
So based on 192%, we start this year at $40,000, and by the end of the year, Bitcoin could reach $125,000. Last July, we saw an indicator that when Bitcoin sets a new yearly high within a year, there will be a 300% rebound. So based on this data, we can also infer $125,000. We were accurate in our judgment last year, but this year we may be more conservative, and Bitcoin may reach $125,000 by the end of this year or next year.
BlockBeats: $125,000, that’s crazy. So, what is the main reason for Bitcoin to reach this level? Is it ETF? I feel like we are underestimating the impact of ETF.
Markus: Asia may not understand or may not be aware that many asset management companies in the United States are using ETFs for their asset allocation decisions. In Asia, people like to buy specific stocks, such as individual stocks like Bank of China. In contrast, in the United States, when investors like a bank, they buy the entire basket. This is the real meaning of ETF.
These asset management companies manage a large amount of funds, not just managing a thousand dollars but billions of dollars. They won’t say they invested one million dollars in JPMorgan, they will only say it’s a billion-dollar bank index. These people have access to ETFs, astronomical amounts of money. We have been trying to indicate since July last year that if these ETFs are approved, the entry of billions of dollars will have a huge impact.
The market has been comparing the changes in Tether’s market capitalization with Bitcoin prices. For example, the issuance of 10 billion USDT theoretically should mean that 10 billion US dollars of fiat currency enter the cryptocurrency market. But now this money can flow into Bitcoin ETFs instead of going through USDT, so we are witnessing this surge.
BlockBeats: So, ETF is the main reason for the current surge?
Markus: It’s ETF, but ETF represents the institutionalization of Bitcoin. I have traded gold, interest rates, and foreign exchange. When there is uncertainty, you buy gold because it is a hedging tool. But Bitcoin is a better hedging tool.
Firstly, it has a much stronger reaction to changes in US interest rates. It has a much stronger reaction to wars, such as the Bitcoin rally during the Russia-Ukraine conflict. You know, when there is a banking crisis in the United States, as we saw last March, Bitcoin rose from $20,000 to $28,000 within two weeks. Bitcoin is becoming a better macro asset than gold.
There are currently two largest gold ETFs, with a combined asset management size of $80 billion. One of them, with $55 billion in assets, experienced $2.7 billion in outflows. I suspect that this outflow of funds has been transferred to Bitcoin. I believe this is a shift in allocation from gold to digital gold. So, we may not see registered investment advisors or institutions personally buying Bitcoin. What we may see now is people holding gold shifting their allocation to digital gold.
BlockBeats: Do you think there will be any black swan events?
Markus: It’s highly unlikely. We are currently in a bull market, and it seems unlikely from regulations and the Bitcoin network itself. The only possible black swan event would be someone accessing Satoshi Nakamoto’s wallet.
BlockBeats: Many people are curious about how you analyze the market. Do you use any tools or models?
Markus: Yes, we have many tools that we run every day. In the past few years, every day, whether it’s a weekend or a holiday, I would store data as soon as I wake up, just so that we can understand what is happening and see if there are any changes in supply and demand. At the same time, we run many quantitative models. For example, when Bitcoin was at $48,000 two weeks ago, it was overbought, and the market’s conclusion was to take profits.
But in reality, our backtesting gave the opposite conclusion. In October 2022, when everyone was talking about regulation, a bear market, bankruptcy, Bitcoin was priced at $20,000, but we predicted $63,000. At that time, it seemed strange, but it was the data that told us.
BlockBeats: Have there been any instances where the data told you that Bitcoin would rise, but you personally thought it should decline?
Markus: Based on my experience, the data is often correct. And the most painful moments are when you see that your model is correct, but you didn’t follow it. For example, last night I thought I should settle some profits, but then I suddenly saw that trading activity in Korea had increased significantly in the past 24 hours. A few months ago, on Upbit, the trading volume was less than $1 billion. But in the past 24 hours, the trading volume exceeded $7 billion. So, the Asian trading hours are no longer stagnant.
BlockBeats: As more people read your reports, it seems like your reports are increasingly influencing the market. Do you feel more pressure?
Markus: Yes. It’s about providing good analysis for our readers and subscribers and delivering high-quality reports. The more attention you receive and the more people who follow you, the more pressure you feel. Especially when we have been accurate so many times, we are naturally afraid of being wrong. But I still believe in my data and models.
BlockBeats: Besides ETFs and the inflow of gold funds, are there any other reasons that could drive up Bitcoin prices?
Markus: Honestly, I don’t see any other reasons at the moment. This bull market is very different. The previous bull market was the DeFi summer, where altcoins were the main focus. But this time, it is more or less concentrated on Bitcoin.
BlockBeats: So, it could be a Bitcoin bull market rather than an altcoin bull market.
Markus: Yes.
BlockBeats: But many people think that funds profiting from Bitcoin could flow into other altcoins.
Markus: Those who buy ETFs don’t see it that way. Bitcoin’s dominance is around 52%. If there is indeed a rebound in altcoins, Bitcoin’s dominance will drop below 50%. But I haven’t seen the narrative for altcoins yet. There was a narrative during the DeFi summer, but I haven’t seen it now.
BlockBeats: How long do you think this bull market will last?
Markus: I think it will continue until February or September next year.