As the critical moment of approval for the Bitcoin spot ETF approaches, the price of Bitcoin reached $45,000 this morning. The cryptocurrency financial service platform Matrixport predicts that the price of Bitcoin will significantly rise to $50,000 in January.
On December 30th, Reuters quoted sources saying that the U.S. Securities and Exchange Commission (SEC) may approve the first batch of Bitcoin spot ETFs this Tuesday or Wednesday. However, Fox Business reporter Eleanor Terrett stated this morning that the likelihood of approval this week is not high, but there is still a chance in the next two weeks. This news seems to have had a positive impact on the price of Bitcoin, pushing it to $45,000 this morning.
Matrixport, the cryptocurrency financial service platform, predicted earlier today that the price of Bitcoin will significantly rise to $50,000 in January. This prediction is based on market conditions and observations of investor behavior. In their report, Matrixport points out that after a consolidation period in mid to late December, Bitcoin is expected to have strong buying momentum in the new year. Institutional investors who previously held bearish views are expected to make immediate purchases when the market opens in 2024 to not miss potential price increases.
Matrixport believes that the potential approval of the Bitcoin spot ETF may be announced earlier than expected next week, which could further drive up prices unexpectedly. Additionally, Matrixport believes that the approval will not be a “sell the news” event because the Bitcoin spot ETF will make Bitcoin a legitimate asset in institutional portfolios.
At the same time, Bitcoin holders are increasingly transferring assets from exchanges to self-custody wallets, reducing the available trading volume on exchanges. Combined with the possible further supply limitations by mining companies around the halving period (expected in April 2024), this could lead to scarcity. Previously, Matrixport estimated that the Bitcoin spot ETF could bring in $24-50 billion in capital inflows, which could significantly drive up the price of Bitcoin in a supply-constrained market.
Finally, the report points out that historically, Bitcoin has performed well during halving periods and U.S. election years. Market indicators, such as the funding rate of Bitcoin reaching a new high this morning (+66% annualized), further support the prediction of price increases. Taking into account these factors, Matrixport believes that Bitcoin may rise above the target level of $50,000 in January.
Bitcoin funding rate. Source: Matrixport report
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