Matrixport bases its anticipation of the Bitcoin price rally on four major factors, such as the Bitcoin halving, ETF inflows, the US elections, and the Fed’s policy decisions with interest rate cuts.
In its latest report, financial services platform Matrixport stated that it expects the price of Bitcoin to reach $63,000 in March 2024, that is, within a month. This would mean another 21% on the price of BTC, which is already up 15.6% since the beginning of 2024.
Matrixport points out four main catalysts that could drive BTC price action, explained below.
Bitcoin ETF Inflows
Since their launch last month, Bitcoin spot ETFs have witnessed staggering inflows amid high institutional demand. Earlier this week, daily trading volume for spot Bitcoin ETFs rose to nearly $2 billion, marking the highest level since trading began on January 11.
As noted above, Bitcoin spot ETFs saw a significant inflow of around $2.3 billion last week, nearly doubling the previous week’s $1.2 billion inflow. On Thursday, February 22, Bitcoin spot ETFs collectively experienced net inflows totaling $251 million.
However, there were variations between specific ETFs: Grayscale ETF GBTC saw a net outflow of $55.67 million on the day, while Fidelity ETF FBTC saw a net inflow of $158 million, contributing to a record net inflow. of 4,050 million dollars.
BlackRock ETF IBIT recorded a single-day net inflow of $125 million, and its total historical net inflow reached $5.74 billion, according to data from SoSoValue.
Bitcoin Halving
While Bitcoin ETFs have been around for almost a month, Bitcoin bulls are focusing more on the next halving scheduled for April 2024, which will reduce block rewards to half, of the existing 6.5 BTC per block to 3.25 BTC. per block. This will further increase the demand/supply ratio and widen the gap, boosting the price of Bitcoin.
According to Willy Woo, the Bitcoin network is currently witnessing an influx of approximately $607 million per day in new investor demand. This demand stands in stark contrast to the relatively modest $46 million per day in new supply of newly mined coins. “We are now 60 days away from seeing new supply being halved,” he concluded his post on X dated February 22.
This clearly shows that the demand for Bitcoin is 13 times greater than the supply, which will only increase further after the halving.
Interest Rate Cuts
Moving forward in the report, Matrixport underscores the critical importance of the Federal Reserve’s stance on interest rates.
If there were a possible reduction in interest rates, it could stimulate demand for riskier assets, which could cause cryptocurrency prices to rise.
The global investor community has been waiting for the Federal Reserve’s call to cut rates. However, considering the inflation situation, rate cuts are unlikely to occur during the first half of the year.
While US indices have been climbing on Wall Street, with the S&P 500 hitting all-time highs, the chances of a US recession cannot be completely ruled out.
US Presidential Election 2024
Finally, the upcoming 2024 US presidential election and the accompanying political uncertainties introduce a layer of complexity to Matrixport’s analysis. The intricate interplay between political events and cryptocurrency markets complicates the ability to make definitive forecasts about Bitcoin’s trajectory.
Matrixport reports that February remains a good period for Bitcoin investments, based on ten-year charts. Historically, February has seen an average return of 8% for Bitcoin in seven out of ten cases.
By Leonardo Perez
